The government announced its acceptance of the Low Pay Commission’s recommendations on the rates of the National Minimum Wage (NMW), including the National Living Wage (NLW).

Key Points:

  • Effective April 1, 2025, the NLW will rise 6.7%, from £11.44 to £12.21 (about US$15.70).
  • The rates for the NLW and NMW are set by the government every year, with the new rates taking effect the following April.
  • These rates are for the NLW (for those age 21 and over) and the NMW (for those of at least school-leaving age), and the hourly rate for the minimum wage also depends on whether you’re an apprentice.
  • The rates that will apply beginning April 1, 2025, will be:
  NMW Rate Increase Percentage Increase (%)
National Living Wage (21 and over) £12.21 £0.77 6.7
18–20-Year-Old Rate £10.00 £1.40 16.3
16–17-Year-Old Rate £7.55 £1.15 18.0
Apprentice Rate £7.55 £1.15 18.0
Accommodation Offset £10.66 £0.67 6.7

Additional Information: The NLW is different from the U.K. Living Wage and the London Living Wage, calculated by the Living Wage Foundation, that are voluntary pay benchmarks and not legally binding requirements. The NLW higher rate (£12.21) is still lower than the £12.60-an-hour rate calculated by the Living Wage Foundation that is paid voluntarily by 15,000 U.K. employers.

BAL Analysis: The NLW pay rise will impact over 3 million workers next year. Government officials for the first time asked the Low Pay Commission to consider the cost of living, including expected trends in inflation up to March 2026, when recommending the NLW. The Low Pay Commission’s recommendations also intend to meet the government’s ambition for the NLW rate to reach at least two-thirds of median earnings in 2024. The 18-20 NMW rise also highlights the government’s first step toward a single adult rate being extended to 18-year-olds in future years. Officials stated these increases build on the government’s commitment to be a pro-business, pro-worker and pro-growth government.

This alert has been provided by the BAL Global Practice Group.

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