UK Minimum Wage 2025: What You Need to Know About the New Rates

With the rising cost of living and the economy constantly shifting, staying updated on wage changes is more important than ever, especially for students balancing part-time jobs or apprenticeships. Starting April 2025, new minimum wage rates have come into effect for different age groups and employment types. This blog discusses what these changes mean for you and how they can impact your income while studying in the UK.

What Is A Minimum Wage? 

The minimum wage is the lowest hourly rate that employers are legally required to pay their workers. It’s designed to ensure fair compensation for time and effort, protect employees from exploitation, and support a basic standard of living. 

What Is The Minimum Wage In The UK In 2025?

Starting April 1, 2025, the UK has introduced significant increases to the National Minimum Wage (NMW) and National Living Wage (NLW) rates, impacting millions of workers across various age groups. With the rising cost of living, these updates help workers earn more. Check out the new rates for 2025 below:

Also Read: Cost Of Living In The UK In 2025

For students and young professionals aiming to make the most of their income, it’s also essential to understand how the Voluntary Living Wage differs from the government’s minimum, especially if you are job hunting in high-cost areas like London.

The Voluntary Living Wage Rates

The Voluntary Living Wage, also known as the real living wage, is a higher hourly pay rate set independently by the Living Wage Foundation, not the UK government. Unlike the legal National Living Wage, which is mandatory for employers, the Voluntary Living Wage is optional but considered more reflective of the real cost of living in the UK.

This rate is calculated based on what people need to earn to afford essentials like housing, food, and transport. It typically exceeds the government-set minimums and is updated annually.

As of recent figures, the Voluntary Living Wage is:

• £12.00 per hour across the UK
• £13.15 per hour in London (due to higher living costs)

Thousands of employers across the UK have adopted the Voluntary Living Wage as a commitment to fair pay and social responsibility.

Also Read: Cost Of Living In London For Students – 2025

Minimum Wage Job Categories in the UK

In the UK, the government sets and reviews the rate annually, and it varies depending on factors like age and employment status.

There are two main categories within the wage structure:

• National Minimum Wage: Applies to workers under 21 or those enrolled in apprenticeship programmes.
• National Living Wage: Applies to workers aged 21 and over. 

Jobs that commonly fall under the minimum wage 

Also Read: Best Jobs In The UK For Indian Students 2025

Who Is Entitled to the UK Minimum Wage?

How To Check If You Are Getting Paid The Right Wage?

If you work in the UK, knowing your rights is essential. Here’s how to quickly check if your wages meet the UK’s National Minimum Wage or National Living Wage standards.

• Use the GOV.UK Calculator: Use the official tool to check if your pay meets the NMW/NLW based on your age or apprenticeship status.
• Calculate Your Hourly Rate: Divide your gross pay by the hours worked in a pay period. Compare it with the current minimum wage as given in the section above. 
• Review Payslips & Contract: Check your payslips for hours worked, pay rates, deductions, and bonuses. Ensure they align with your contract.
• Know What Counts as Work: Include all paid time—training, travel (if job-related), and on-call hours where applicable.
• Raise Concerns If Needed: Speak to your employer first. If the issue is unresolved, contact Acas for advice or report it to HMRC (you can stay anonymous).

Minimum Wage Rules for Breaks, Sick Leave, and Holidays

Rest Breaks

If you work more than 6 hours a day, you are entitled to a 20-minute break.

However, unless your contract specifies otherwise, this time is unpaid and doesn’t count toward minimum wage calculations.

Sick Leave

If you are on full pay during sick leave, those hours do count toward minimum wage.

But if you are only receiving statutory sick pay or no pay at all, those hours are excluded.

Paid Holidays

Employees are entitled to at least 5.6 weeks of paid holiday annually.

If holiday pay matches your normal earnings (including regular bonuses or overtime), it counts toward minimum wage.

What Does Not Count Towards the National Minimum Wage in the UK?

When calculating whether a worker is receiving the NMW, certain payments and benefits are excluded:

• Tips and Gratuities: Tips, service charges, and cover charges, regardless of how they are paid, do not count towards NMW pay. 
• Benefits in Kind: Non-cash benefits provided by the employer, such as meals, childcare vouchers, or company cars, are excluded from NMW calculations.
• Employer’s Own Use Payments: Payments made by the worker for the employer’s benefit, like deductions for travel to work arranged by the employer, are not included. 
• Work-Related Expenses: Costs incurred by the worker for items necessary for the job (e.g., tools, uniforms) that are not reimbursed by the employer do not count towards NMW pay. 
• Overtime and Shift Premiums: Additional pay for working unsocial hours or overtime is excluded from the basic NMW calculation. 

Criteria for Minimum Wage Deduction

Employers can make certain deductions from a worker’s pay, but specific rules apply to ensure compliance with NMW laws:

• Permissible Deductions: Deductions for items like uniforms or tools required for the job are allowed, but reduce the worker’s pay for NMW purposes.
• Accommodation Offset: If an employer provides accommodation, a fixed daily amount can be offset against the NMW. Any charge above this limit reduces the worker’s pay for NMW calculations. 
• Loan Repayments: Deductions for genuine loans or wage advances do not affect NMW pay, provided proper documentation and the worker has received the funds. 
• Retail Workers: Deductions for cash shortages or stock deficiencies are limited to 10% of gross pay per pay period for retail employees. 

With rising living costs and updated wage laws, staying informed about the UK’s minimum wage in 2025 is essential. Understanding both the legal minimum wage and the voluntary living wage empowers you to make smarter work and lifestyle choices.

And if you are planning your student life in the UK, managing your living expenses starts with the right accommodation. UniAcco helps you find affordable, fully verified student housing in the UK that fits your budget and lifestyle.

FAQs

Q. What are the minimum wages in the UK?

Ans: As of April 1, 2025, the UK’s minimum wage rates are:

• £12.21 per hour for those aged 21 and over
• £10.00 per hour for 18–20 year olds
• £7.55 per hour for those aged 16–17 and apprentices

Q. What is the real living wage in the UK?

Ans: The Real Living Wage, set by the Living Wage Foundation, is a voluntary rate based on the actual cost of living. As of the latest update, it’s £12.00 per hour across the UK and £13.15 in London.

Q. What is the basic wage in the UK?

Ans: The basic wage in the UK usually refers to the National Minimum Wage or National Living Wage—the legal minimum hourly rate employers are required to pay their workers, based on age and employment status. 

Q. How Often Is the Minimum Wage Reviewed in the UK?

Ans: The UK government reviews the National Minimum Wage and National Living Wage rates annually, usually in April. The rates may change depending on economic conditions and recommendations from the Low Pay Commission.

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