COMPLIANCE
The minimum wage in 2025
Tony Gordon, Senior Policy Advisor, National Minimum Wage (NMW), the Department for Business and Trade, discusses how minimum wage rates are decided upon and shares why this year has been different
A s payroll professionals know, the minimum wage rates increase in April each year. 2025 was no different, as the national living wage (NLW), for workers aged 21 and over, went up from £11.44 an hour to £12.21 an hour. There were also large increases to the NMW rates for younger workers and those eligible for the apprentice rate. The full changes are shown in the table below. The uprating process Though most of the public are aware of the minimum wage, they may not know how the annual uprating process works – or why this year has been somewhat different. The Low Pay Commission (LPC) is an
“Though most of the public are aware of the minimum wage, they may not know how the annual uprating process works – or why this year has been somewhat different”
independent body in the UK that advises the government on the minimum wage and other low pay issues. Each year, the government provides the LPC with a remit, outlining the scope and tasks for reviewing and recommending wage levels. The remit sets the parameters for assessing minimum wage rates for various age groups and workers, taking into account
economic conditions and the impact on businesses and workers. The LPC consults with a range of stakeholders, including businesses, trade unions and experts, to gather feedback on the effects of the minimum wage. It also conducts detailed economic analysis to assess how wage levels impact different sectors and the broader economy.
2024 rate
2025 rate
Annual increase (%)
Annual increase (£)
NLW (21 and over)
£11.44
£12.21
6.7%
77p
18-20-year-old rate
£8.60
£10.00
16.3%
£1.40
16-17-year-old rate
£6.40
£7.55
18.0%
£1.15
Apprentice rate
£6.40
£7.55
18.0%
£1.15
Accommodation offset
£9.99
£10.66
6.7%
67p
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 24
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