National Minimum Wage April 2025 Increase: New Rates and What They Mean for Take-Home Pay
From 1 April 2025, the National Living Wage (NLW) and National Minimum Wage (NMW) rates increased for all age groups. The NLW — which applies to workers aged 21 and over — rose from £11.44 to £12.21 per hour, an increase of 6.7%. This is the largest cash increase in the history of the NLW, and it applies to approximately 3 million workers across the UK.
Full NMW/NLW rates from April 2025
| Category | Previous rate (April 2024) | New rate (April 2025) | Increase |
|---|---|---|---|
| National Living Wage (21+) | £11.44 | £12.21 | +67p (+6.7%) |
| Age 18–20 | £8.60 | £10.00 | +£1.40 (+16.3%) |
| Age 16–17 | £6.40 | £7.55 | +£1.15 (+18.0%) |
| Apprentice rate | £6.40 | £7.55 | +£1.15 (+18.0%) |
The extension of the NLW to 21-year-olds (previously it applied from age 23, then 21 from April 2024) and the substantially higher rates for 18-20 year olds reflect the government's ambition to reduce the age-related pay gap.
What NLW workers take home after tax in 2025-26
For a full-time worker (37.5 hours per week, 52 weeks) at the National Living Wage of £12.21:
- Annual gross: £12.21 × 37.5 × 52 = £23,810
- Income Tax: £2,248 (20% on earnings above £12,570)
- National Insurance (8%): £904
- Total deductions: £3,152
- Net annual take-home: approximately £20,658
- Net monthly take-home: approximately £1,722
Compare this to the previous year at £11.44 per hour: gross £22,308, take-home approximately £19,599. The April 2025 increase is worth approximately £1,059 extra per year after tax for a full-time NLW worker.
18–20 rate: the big story for younger workers
The 18-20 rate increased by 16.3% — from £8.60 to £10.00 per hour. This is a very substantial jump. A full-time worker aged 18-20 now earns:
- Annual gross: £10.00 × 37.5 × 52 = £19,500
- Income Tax: £1,386
- National Insurance: £557
- Take-home: approximately £17,557
At the previous £8.60 rate (£16,770 gross), the equivalent take-home was approximately £15,533 — a boost of roughly £2,024 per year after tax.
Enforcement
Paying below the NMW is illegal. HMRC enforces minimum wage compliance and can impose penalties of up to 200% of the underpayment on non-compliant employers, plus requiring repayment to affected workers. Workers who believe they are being paid below the minimum wage should contact ACAS or the government's Pay and Work Rights Helpline.
Frequently asked questions
Does the NLW apply to salaried workers?
Yes. The NMW/NLW applies to all workers regardless of how they are paid — hourly, weekly, monthly, or annually. For salaried workers, the test is whether their effective hourly rate (salary ÷ hours worked) equals or exceeds the minimum wage. A salaried worker regularly working 50 hours per week must still be paid at least the NLW rate per hour across those 50 hours.
Do tips count towards minimum wage?
No. Since October 2024, tips must be passed on to workers in full and cannot be counted towards satisfying the minimum wage requirement. Employers must pay the NMW/NLW from base wages alone, and tips are additional to this.