Millions of households across the UK will get up to £2,700 extra into their bank accounts this year in a major pay boost from the government.
Chancellor Rachel Reeves confirmed in the October Budget that minimum wages will rise by 6.7% from April, in what she described as a “significant step” towards achieving Labour's promise of a “genuine living wage” for workers.
The pay increase, recommended by the Low Pay Commission (LPC), will see hourly rates for workers over 21 rise to £12.21, up from the current rate of £11.44 per hour. It means that those working full time, or 37.5 hours per week, will see their annual pay increase from £22,308 to £23,809.50 before tax – a pay boost of £1,501.50
Workers aged 18 to 20 will see their wages rise by 16.3% from £8.60 per hour to £10 from April, meaning someone on a 37.5-hour week would earn £19,500 per year on the new rate, up from £16,770 – an overall increase of £2,730.
Meanwhile apprentices will get an 18% pay rise from £6.40 per hour to £7.55, taking their annual wage up to £14,722.50 from the current £12,480 – a boost of £2,242.50.
Around 1.6 million workers are set to benefit from the increase which will come into effect on April 1, 2025.
The minimum wage, known as the National Living Wage, is what employers are required to pay workers by law and the hourly rate depends on your age and whether you are an apprentice.
The April pay increase comes on top of Labour's plan to expand workers' rights, which the Treasury said would boost the incomes of the lowest-paid workers by up to £600 a year.
The government said: “In accepting the recommendation from the LPC, from April 2025, the National Minimum Wage (NMW) for 18-20-year-olds will be £10.00 per hour, an increase of 16.3%, the largest ever increase in both cash and percentage terms. This means a boost to annual earnings of over £2,500 for nearly 200,000 young people across the UK.”
Commenting on the pay boost after the Budget last year, Deputy Prime Minister Angela Rayner, one of the key supporters of Labour's Employment Rights Bill, said: “A proper day's work deserves a proper day's pay.
“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.”