LEGAL UPDATE: National Minimum Wage increases

6th January 2025

Employment law, Newbury, Berkshire.

In case you missed the news last year, the Government accepted the Low Pay Commission’s (LPC’s) recommendations for increases to the National Living Wage (NLW) and National Minimum Wage (NMW) to apply from April 2025. The figures are the first produced by the LPC since its remit was altered to take account of the cost of living, including expected trends in inflation up to March 2026.

The following rates apply from 1 April 2025:

  • National Living Wage (for workers aged 21 and over): The rate will increase from £11.44 per hour to £12.21 per hour.
  • National Minimum Wage (for workers aged 18 to 20): The rate will rise from £8.60 per hour to £10.00 per hour.
  • National Minimum Wage (for workers aged 16 and 17): The rate will increase from £6.40 per hour to £7.55 per hour.
  • Apprentice Rate (for apprentices): The rate will rise from £6.40 per hour to £7.55 per hour.
  • Accommodation Offset (for workers provided with accommodation by employers): The daily offset will increase from £9.99 to £10.66 per day.

The government aims to align the National Minimum Wage (payable to 18-20 year olds) and National Living Wage (payable to workers aged 21 and above) over time, creating a single adult wage rate.

The increases this year are substantial. This is a big, expensive hit for employers—especially when viewed alongside the other payroll changes made in the Autumn budget. This means that, from April 2025, the rate of employer NI contributions (NICs) will increase by 1.2 percent to 15%, and employers will start to pay NICs on employees’ earnings from £5,000 instead of the current £9,100 threshold.

If you need help with these changes or any employment law issues, please contact our employment team at 01635 896336 or email us at hello@fentonelliott.co.uk

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