Minimum wage in the UK explained
The 2025 UK minimum wage rates and who qualifies, plus how to make the most of your earnings
Almost every worker in the UK is entitled to the National Minimum Wage (NMW), and some employees are also eligible for the higher rate National Living Wage (NLW). From April 2025, the rates have increased for every age group. In this article, we outline the latest hourly rates, who qualifies based on age or job type, and what you can do to save money while earning the minimum wage.
UK minimum wage 2025: Following rate increases in April 2025, workers aged 21 and over now earn £12.21 per hour. Those aged 18 to 20 receive £10 per hour, while under 18s and apprentices get £7.55.
Legal entitlement: Employers are legally required to pay their workers the minimum wage. Those that don’t will be fined and may be taken to court.
Yearly review: The government asks the Low Pay Commission to review the National Minimum Wage and National Living Wage rates every year. The new rates take effect from 1 April.
What is a minimum wage?
The National Minimum Wage (NMW) is the minimum wage per hour a worker is entitled to earn in the UK by law. The rates are set by the government, who reviews and sometimes adjusts them on 1 April each year.
The minimum wage you receive depends on your age and role. The National Minimum Wage is for anyone aged under 21. Once you reach the age of 21, you’ll be paid at least the National Living Wage, which is slightly higher and aims to provide a higher standard of living.
There’s also something known as the Real Living Wage, which is an hourly rate voluntarily paid by some employers to reflect the actual cost of living. In London, for instance, this rate is slightly higher than the National Minimum Wage, at £13.85, because it reflects the higher living costs in the capital.
Who earns a minimum wage in the UK
To meet the conditions for the National Minimum Wage in the UK, you must be classed as a worker and have reached school leaving age, which is 16. This includes full-time, part-time, casual, and zero-hours contract workers. Apprentices under 19 or in their first year of apprenticeship have a separate, lower rate. Other types of workers, such as self-employed people or volunteers, are not eligible for the minimum wage.
What is the new minimum wage from April 2025
On 1 April 2025, the rates for minimum wage increased to:
Your age | Entitled wage | Current hourly rate |
|---|---|---|
21 and over | National Living Wage | £12.21 |
18 to 20 | National Minimum Wage | £10 |
Under 18 | National Minimum Wage | £7.55 |
Apprentice (aged under 19, or aged 19 or over and in the first year of their apprenticeship) | National Minimum Wage | £7.55 |
What is the new minimum wage from April 2025?
Yes, from 1 April 2025, the rates will change to:
Your age | Entitled wage | Hourly rate |
|---|---|---|
21 and over | National Living Wage | £12.21 |
18 to 20 | National Minimum Wage | £10.00 |
Under 18 | National Minimum Wage | £7.55 |
Apprentice (aged under 19, or aged 19 or over and in the first year of their apprenticeship) | National Minimum Wage | £7.55 |
The current rates for NLW and NMW are as follows:
Your age | Entitled | Hourly rate | |
21 and over | National Living Wage | £11.44 | |
18 to 20 | National Minimum Wage | £8.60 | |
Under 18 | National Minimum Wage | £6.40 | |
Apprentice (aged under 19, or aged 19 or over and in the first year of their apprenticeship) | National Minimum Wage | £6.40 |
How does the minimum wage work?
The hourly rate a worker receives is determined by both their age and whether they are an apprentice. It’s worth noting that some parts of your pay don’t count towards your minimum wage. This includes tips, overtime payments, a loan from your employer, or a pay advance. Commission, on the other hand, is included.
An employer can take certain deductions from your pay, but only for things such as tax and national insurance contributions, pension payments, trade union fees and any charges for accommodation they provide. If you have a student loan and meet the repayment threshold, this is also taken out of your salary if you’re employed.
If you think your employer isn’t paying you the correct minimum wage, you have the right to raise a complaint with HMRC, who enforce minimum wage laws and can investigate any underpayment.
How is the minimum wage determined?
The government sets the minimum wage rates based on recommendations from the Low Pay Commission. This commission reviews various factors including inflation, the cost of living, and the impact on employment before advising on rate changes. The government may then adjust the rates accordingly, which they typically do by 1 April each year. The idea is to balance the needs for workers to be paid fairly with the realities of businesses of all sizes.
Do you pay tax on minimum wage in the UK?
You might still be taxed on your income even if you earn minimum wage, with different thresholds applicable based on how much you earn.
You won’t pay any income tax on earnings of up to £12,570 per year, which is the personal tax allowance that every UK taxpayer receives. Anything you earn between £12,570 and £50,270 will be taxed at 20%.
Why is the minimum wage different for different ages?
A varying scale of minimum wage exists so that more people of various ages and experience levels can find employment. Research indicates that higher minimum wages can increase the cost of employing younger, less experienced workers. As a result, those younger people may be passed over for job opportunities, particularly in sectors like hospitality and retail that tend to offer a way into the workforce
While younger workers usually receive lower wages than older workers, a couple of reasons for that might be because they often lack the experience and have a higher training cost than older and more experienced employees.
Overall, the aim of minimum wage is to ensure a higher percentage of employment for younger people.
What is the National Living Wage?
The National Living Wage (NLW) is paid to workers in the UK aged 21 and over. As of April 2024, this is £11.44 an hour.
How to save money on the minimum wage
If you’re earning the minimum wage or receiving a modest income, saving money can be challenging. However, you can make your money go further through:
Budgeting, so you know exactly how much is coming in and going out each month and can work out what you can cut back on.
Rethinking spending on things you don’t really need.
Paying bills on time to avoid extra charges that eat into your income.
Contributing to a savings account with a competitive interest rate to get more from your wages.
From budgeting to money-saving, our website features articles that show how it might still be possible to save money from your salary even if you’re on minimum wage
How to start saving on the minimum wage with Raisin UK
If you find you’re able to save some of your wages, you could consider opening a savings account that will allow you to plan for your future and meet your savings goals. Raisin UK makes it easy to find and compare competitive savings accounts all in one place, so you can make the most of every penny you manage to save. Whether you prefer easy access savings accounts, notice accounts, or fixed rate bonds, with Raisin UK, it’s easy to find an option that works for you - and it’s free to register.
*https://ifs.org.uk/articles/combined-impact-minimum-wage-and-tax-increases-may-reduce-opportunities-young-people
The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.
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