Budget 2025: National living wage to rise to £12.21 in April 2025

On the day the new Labour government unveils its first fiscal event, the Low Pay Commission said its recommendations “meet the remit set by the government” and are “expected to equal two-thirds of median earnings and to have the highest real value in the history of the UK’s minimum wage”.

The new rates that will apply from April 1, 2025, will be:

The Low Pay Commission said its recommendations are “based on extensive consultation with employers, workers, representatives of both groups and other expert bodies, as well as [on a] series of regional visits across the UK”.

Baroness Philippa Stroud, chair of the commission, said: “The government have 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 has created alongside other pressures to their cost base.

“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.

“The data show some signs of employers finding it harder to adapt to minimum wage increases. The tightening of the labour market since the pandemic has unwound, but the overall picture is similar to 2019. The economy is expected to grow over the next year, although productivity growth remains subdued.

“We look forward to continuing our work next year as the detail of the Make Work Pay plan is elaborated upon. The NMW is a major part of the Government’s ambitions for the future of the labour market, and it is important that it continues to be informed by the expertise and consensus-building the LPC provides.”