National Living Wage rises by 6.7%

Over three million workers will get a pay boost next year following an increase in the National Living Wage by 6.7%.

Announced by the chancellor ahead of the Budget tomorrow, the National Living Wage will increase from £11.44 to £12.21 an hour from April 2025 and is worth £1,400 a year for an eligible full time worker.

For 18-20 year olds, the National Minimum Wage will rise by £1.40 per hour - the largest increase on record. This means it will go up from £8.60 to £10.00 an hour. For a full-time younger worker eligible for the rate, this represents a pay boost of £2,500 next year.

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Chancellor Rachel Reeves said: “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 National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour – the largest increase in the rate on record. This £1.40 increase will mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year. This marks the first step towards aligning the National Minimum Wage and National Living Wage to create a single adult wage rate, which would take place over time.

The move comes ahead of the Budget tomorrow which will fix the foundations to deliver change by fixing the NHS and rebuilding Britain, while ensuring working people don’t face higher taxes in their payslips, the Treasury stated.

Chancellor of the Exchequer Rachel Reeves said: “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”.

Deputy prime minister, Angela Rayner, added: “Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”

Apprentice pay bumped up 18%

In addition to increasing the National Living Wage, Labour has also pushed up the minimum hourly wage for an apprentice. This means 18-year-old apprentice in an industry like construction could see their minimum hourly pay increase by 18%, a pay bump from £6.40 to £7.55 an hour.  

The pay increases confirm the Low Pay Commission’s recommendations, whose advisory remit was overhauled by ministers in July to consider the cost of living.

Chair of the Low Pay Commission, Baroness Philippa Stroud said: “The Government has been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that [this] has created alongside other pressures to their cost base.”