Minimum Worker Salary Surges by 6.7 Percent Nationwide
Budget 2025: Significant Wage Increases Announced for Minimum Wage Workers
In a landmark announcement ahead of tomorrow's Budget, Chancellor Rachel Reeves has unveiled plans for substantial wage increases for minimum wage workers in the UK. The changes aim to improve earnings, particularly for younger and apprentice workers, while ensuring that the overall minimum wage remains a viable living wage for adults.
From April 2025, the National Living Wage (NLW) for workers aged 21 and over will increase by 6.7%, rising from £11.44 to £12.21 per hour[1][2]. This change means a full-time worker (37.5 hours per week) will earn about £23,873.60 annually, up from £22,368.06[1].
For other age groups, the National Minimum Wage (NMW) rates are increasing even more substantially:
- Ages 18–20: £10.00 per hour, up 16.3% from previous rates[2].
- Ages 16–17: £7.55 per hour, up 18%[2].
- Apprentices (all ages): £7.55 per hour, up 18%[2].
The accommodation offset (an allowance employers can deduct for lodging provided to workers) also rises by 6.7%, to £10.66 per day[2].
These increases reflect the government's aim to align the NLW with two-thirds of median earnings and to support workers amid cost-of-living pressures[3][4]. Additionally, there are plans to progressively remove age-based pay differentials for adults, potentially raising the NLW age threshold below 21 in the coming years. The Low Pay Commission will provide formal recommendations for April 2026 by October 2025, with projections for the NLW rising to around £12.71 (a 4.1% increase) that year[3][4].
The announced pay boost is a significant step towards delivering on the Government's promise of a genuine living wage for working people. The increase in the National Living Wage is worth £1,400 a year for an eligible full-time worker[1]. Moreover, the Low Pay Commission's recommendations for the apprentice minimum wage have been confirmed by the Government[1].
In summary, the Budget raises wages noticeably, with higher percentage increases for younger workers and apprentices, to improve income fairness while balancing economic factors and employment prospects.
Summary Table:
| Age Group / Category | New Hourly Rate (April 2025) | Percentage Increase | |-----------------------------|------------------------------|---------------------| | 21 and over (NLW) | £12.21 | 6.7% | | 18–20 years | £10.00 | 16.3% | | 16–17 years | £7.55 | 18.0% | | Apprentices (all ages) | £7.55 | 18.0% | | Accommodation offset (daily) | £10.66 | 6.7% |
These changes aim to improve earnings particularly for younger and apprentice workers while ensuring that the overall minimum wage remains a viable living wage for adults[1][2][4].
[1] HM Treasury (2025). Budget 2025: National Living Wage to rise by 6.7%
[2] Low Pay Commission (2025). National Minimum Wage 2025: Recommended rates for the UK
[3] The Guardian (2025). Budget 2025: National Living Wage to rise by £1,400 a year for full-time workers
[4] BBC News (2025). National Living Wage to rise by 6.7% from April 2025
In light of these wage increases for minimum wage workers, it is essential for businesses to adjust their financial plans accordingly to accommodate the rising costs. With the National Living Wage (NLW) for workers aged 21 and over increasing by 6.7%, many businesses might need to revise their personal-finance projections for their employees.
