UK Govt confirmed 6.7% increase in National Minimum Wage 2025: The UK government has confirmed a significant increase in the National Minimum Wage, set to take effect from April 1, 2025. This rise aims to support low-income workers by putting more money into their pockets, following the October 2024 budget announcement. However, while the wage boost is welcomed by many, concerns remain about its impact on businesses and employment.
New Minimum Wage Rates from April 2025
From April 2025, the minimum wage will increase by 6.7%, providing a higher income for millions of workers across the country. The key changes include:
- The National Living Wage for workers aged 21 and over will rise from £11.44 to £12.21 per hour.
- The minimum wage for workers aged 18-20 will increase from £8.60 to £10.00 per hour.
- Apprentices and workers aged 16-17 will see a pay rise from £6.40 to £7.55 per hour.
This wage adjustment, recommended by the Low Pay Commission, is expected to benefit around 3 million workers directly. An additional 4 million people could experience positive ripple effects as wages across industries adjust accordingly.
How the Wage Increase Affects Workers
For a full-time worker on the National Living Wage, this increase means an additional £1,400 per year in earnings. The government has positioned this as a crucial step towards ensuring a “genuine living wage” for working people.
Employment Rights Minister Justin Madders praised the move, stating that economic growth should translate into higher earnings for workers. Chancellor Rachel Reeves also reinforced the government’s commitment, saying, “We promised a genuine living wage, and we are delivering.”
Concerns from Business Owners
Despite the positive impact on workers, some business leaders have expressed concerns about the increased labour costs. Many employers, particularly in retail, hospitality, and pubs, worry that the wage hike, combined with a rise in National Insurance contributions, could lead to reduced hiring, slower business growth, and increased prices for consumers.
These sectors argue that the higher wages could act as a “jobs tax,” forcing businesses to cut back on investments or pass on costs to customers. As a result, some companies may struggle to expand or maintain their current workforce levels.
Apprentices Get a Major Pay Boost
Apprentices will see a significant 18% wage increase, with their hourly rate rising from £6.40 to £7.55. This will particularly benefit young workers in sectors like construction, where wages have historically been lower for trainees.
Minimum Wage Calculators: Check Your Pay
Workers and employers can use the government’s official minimum wage calculators to check if they are paying or receiving the correct wages. Separate tools are available for workers and employers to determine whether past payments meet the legal minimum wage requirements. Additionally, guidance is available on how to calculate the minimum wage for different types of work.
The upcoming wage increase represents a major shift towards fairer pay for low-income workers. While the boost will help millions deal with the rising cost of living, businesses face new financial challenges. The impact on employment and consumer prices remains to be seen, but the government remains committed to ensuring fair wages for all.
FAQ’s
When does the new minimum wage come into effect?
The new minimum wage rates will take effect from April 1, 2025.
How much will the National Living Wage increase?
The wage for those aged 21 and over will rise from £11.44 to £12.21 per hour.
What is the new minimum wage for 18- to 20-year-olds?
From April 2025, the minimum wage for this age group will increase from £8.60 to £10.00 per hour.
How will apprentices benefit from the wage increase?
Apprentices will see their hourly wage rise from £6.40 to £7.55, an 18% increase.
Will businesses be affected by the wage hike?
Yes, many businesses in retail, hospitality, and pubs are concerned about higher costs, which could impact hiring and investment.
How can I check if I am being paid correctly?
You can use the government’s minimum wage calculator to ensure you are receiving the correct pay.
Why is this increase happening?
The increase follows recommendations from the Low Pay Commission to ensure fair wages for workers.
Will this wage increase affect inflation?
Some economists believe higher wages could lead to increased consumer prices, but the long-term impact remains uncertain.
