Around 2.7 million workers will benefit from increases to the National Living Wage and National Minimum Wage with date set for change
Some of Britain’s lowest-earning workers are poised to see their wages increase as the new National Living Wage, revealed in the November 2025 budget, takes effect from April 1.
From April, the National Living Wage will climb by 4.1% to £12.71 per hour for eligible workers aged 21 and above, which the Government stated would boost gross annual earnings of a full-time worker on the rate by £900, helping approximately 2.4 million low-paid workers.
Around 2.7 million workers will benefit from a 4% pay increase this year, as both the National Living Wage and National Minimum Wage rise. The Government has confirmed this means full-time workers on the National Living Wage will see an uplift of £900 annually, whilst full-time workers on the 18-20 National Minimum Wage rate will experience a £1,500 increase.
Chancellor Rachel Reeves stated she had accepted recommendations from the Low Pay Commission to ensure those on lower incomes are “properly rewarded” for their efforts in last November’s budget.
The National Minimum Wage rate for 18 to 20-year-olds will jump by 8.5% to £10.85 per hour, closing the divide with the National Living Wage.
This will deliver an annual earnings boost of £1,500 for a full-time worker, which the Government described as continued advancement towards its objective of eliminating 18 to 20 wage bands and creating a single adult rate. The National Minimum Wage for 16 to 17-year-olds and apprentices will see a 6% rise to £8 per hour.
The Chancellor, in her announcement, acknowledged: “I know that the cost of living is still the number one issue for working people and that the economy isn’t working well enough for those on the lowest incomes.
“Too many people are still struggling to make ends meet, and that has to change. That’s why today I’m announcing that we will raise the National Living Wage and also the National Minimum Wage, so that those on low incomes are properly rewarded for their hard work.
“These changes are going to benefit many young people across our country, getting their first job.”
The new rates are as follows:
- National Living Wage (21 and over): NMW Rate £12.71 – Increase (£) 50p – Increase (%) 4.1.
- 18-20 Years Old Rate: NMW Rate £10.85 – Increase (£) 85p – Increase (%) 8.5.
- 16-17 Year Old Rate: NMW Rate £8.00 – Increase (£) 45p – Increase (%) 6.0.
- Apprentice Rate: NMW Rate £8.00 – Increase (£) 45p – Increase (%) 6.0.
- Accommodation Offset: NMW Rate £11.10 – Increase (£) 44p – Increase (%) 4.1.
However, the beleaguered hospitality sector has pointed the finger at these minimum wage hikes, coupled with increased national insurance payments, as the cause of businesses folding and jobs being axed. Kate Nicholls, the chair of UKHospitality, voiced her concerns: “Increases to minimum wage rates are yet another cost for hospitality businesses to balance, at a time when they are already being taxed out.
“These additional costs make action at the Budget to reduce hospitality’s tax burden even more important, especially if businesses are expected to sustain this level of annual wage increase.
“Hospitality businesses have reached their limit of absorbing seemingly endless additional costs. They will simply all be passed through to the consumer, ultimately fuelling inflation.”
