National Living Wage Explained
The legal minimum hourly rate for workers aged 21 and over. From April 2025, it is £12.21 per hour, up from £11.44 in 2024-25.
What is the National Living Wage?
The National Living Wage (NLW) is the government-mandated minimum hourly rate for workers aged 21 and over. It is legally enforceable and employers face penalties for paying below it. The rate is reviewed annually by the Low Pay Commission and typically increases each April.
Do not confuse it with the "Real Living Wage" set by the Living Wage Foundation, which is a voluntary rate based on the cost of living (currently £12.60 across the UK and £13.85 in London).
How it works
At £12.21 per hour, a full-time worker on the NLW (37.5 hours per week) earns:
| Period | Gross | After tax and NI |
|---|---|---|
| Weekly | £457.88 | £432.17 |
| Monthly | £1,984.13 | £1,872.73 |
| Annual | £23,809.50 | £22,472.74 |
Workers aged 18-20 receive the National Minimum Wage instead, which is £10.00 per hour for 2025-26. Under-18s and apprentices have separate lower rates.
Real example
Maria works 30 hours per week at the NLW. Her annual gross is £19,047.60 (30 x £12.21 x 52). After Income Tax and NI, her take-home is approximately £17,862 per year, or £1,488.50 per month.
Because her income exceeds the £12,570 Personal Allowance, Maria pays tax on £6,477.60. At the 20% basic rate, that is £1,295.52 in Income Tax. Her NI comes to £518.21 for the year.
Who does this affect?
Around 2.7 million workers in the UK are paid at or near the NLW. This includes workers in retail, hospitality, care, cleaning and warehouse roles. The NLW applies to all employment types including full-time, part-time, agency work and zero-hours contracts.
HMRC source
gov.uk/national-minimum-wage-rates lists the current rates for all age groups.
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