National Living Wage rises to £12.21 per hour from April

Chancellor Rachel Reeves has announced a 6.7% increase in the National Living Wage, set to benefit more than 3 million UK workers from April 2025.

The pay rise will raise the hourly wage from £11.44 to £12.21, delivering an additional £1,400 a year for eligible full-time workers.

This move aligns with government commitments to ensure that the minimum wage provides a genuine living wage, keeping pace with rising living costs.

A significant increase is also planned for younger workers. The National Minimum Wage for 18 to 20-year-olds will rise from £8.60 to £10.00 per hour, a £1.40 boost that represents the largest increase on record.

This uplift is expected to add £2,500 annually to the earnings of eligible full-time workers in this age group and marks the first step towards aligning all adult wage rates, regardless of age.

Rachel Reeves, emphasised the government’s commitment to working families: “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”

The announcement, made ahead of tomorrow’s Budget, is intended to address the cost of living and support economic growth, while reinforcing the government’s vision of a “pro-business, pro-worker, pro-growth” future.

The move builds on measures in the Employment Rights Bill, which is set to boost wages for the lowest-paid workers by up to £600 each year, further supporting low earners’ finances.

Other measures include a rise in the minimum hourly wage for apprentices, with an 18-year-old apprentice in industries such as construction seeing their rate jump by 18%, from £6.40 to £7.55 per hour.

This pay rise aligns with recommendations from the Low Pay Commission, whose mandate was revised in July to account for inflation and the cost of living.

Business Secretary Jonathan Reynolds welcomed the pay increases, saying, “Good work and fair wages are in the interest of British business as much as British workers.”

“This government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience, and ultimately a stronger economy.”

Support for the wage rises also came from businesses and industry leaders. Hilary Jones, Ethics Director at Lush Cosmetics, praised the move for moving wages closer to the real living wage as calculated by the Living Wage Foundation.

“In these tough times where the cost of living continues to rise, it is great to see the Government increase minimum wage closer to these calculations to support the hardest working and most vulnerable workers across the UK,” Ms Jones stated.

Baroness Philippa Stroud, Chair of the Low Pay Commission, also affirmed the importance of maintaining a balance between supporting workers and considering employer cost pressures: “The NLW provides a fair wage for the lowest-paid workers while taking account of economic factors.”