New National Minimum Wage and National Living Wage rates confirmed for April 2025

The recent Budget confirmed the rates of the National Minimum Wage (NMW) and National Living Wage (NLW) that will take effect in April 2025. The confirmed rates are as follows:

• 21 and over     -           £12.21

• 18 to 20           -           £10.00

• Under 18         -           £7.55

• Apprentice       -           £7.55

This is a 6.7 per cent increase for the NLW, a 16.3 per cent increase for those ages 18-20 and 18 per cent for those aged 16-17 and apprentices. The increase for under 21s is the largest on record and it is anticipated that in the coming years, we will see a single rate for all adults.

What do employers need to do to prepare?

Firstly, anyone who is subject to a pay increase in line with the above must be provided with a contract variation to confirm the changes to their pay in writing. The variation should be provided no later than the date that it is to take effect from (1 April 2025).

Given that this is one of the biggest increases we have seen (and coupled with other changes to Employer NICs), employers should ensure that they have properly budgeted for the upcoming increases to NMW and NLW.

The implications of failing to pay NMW go beyond the usual rights for an employee to bring a claim in the Employment Tribunal. If HMRC find that the employer has not paid the NMW, they can issue a notice to pay any money owed going back 6 years. In addition, a fine of up to £20,000 can be issued.

Contact our employment team on employment@buxtoncoates.com or 0330 088 2275 for advice and support with your Employment and HR needs.