National Living Wage What is the National Living Wage? Understand the difference between NLW and NMW, current rates, and who qualifies for the higher rate.
Last updated: 30 January 2025 The National Living Wage is the top tier of minimum wage rates, providing higher pay for older workers.
What Is the National Living Wage?
Definition
The NLW is:
Highest rate of National Minimum Wage
Legal minimum for workers 21+
Set by government
Reviewed annually
History
Year Age Threshold Rate 2016 (introduced) 25+ £7.20 2021 23+ £8.91 April 2024 21+ £11.44
Current Rates
2024-25 Rates
Category Hourly Rate National Living Wage (21+) £11.44 18-20 year olds £8.60 Under 18 £6.40 Apprentice £6.40
When Rates Change
Aspect Detail Annual review Government assessment New rates Usually April each year Announcement Autumn before Implementation April
Who Gets the NLW
Age-Based Entitlement
If You're You Get 21 or over NLW (£11.44) 18-20 NMW (£8.60) Under 18 NMW (£6.40) Apprentice Apprentice rate (£6.40)
When You Turn 21
Timing Your Rate Birthday in pay period NLW from next pay period First day of new period NLW applies Employer must Update rate
Apprentice Transition
Stage Rate Under 19 (any year) Apprentice rate 19+ in first year Apprentice rate 19+ past first year Age-appropriate rate 21+ past first year NLW
NLW vs Real Living Wage
Key Differences
Aspect National Living Wage Real Living Wage Set by Government Living Wage Foundation Legal status Mandatory Voluntary Calculation Various factors Based on living costs Rate (2024-25) £11.44 £12.00 (£13.15 London) Age 21+ All ages
Real Living Wage
Feature Detail Voluntary Employers choose to pay Accreditation Can become Living Wage employer Higher rate Above legal minimum London weighting Higher in London
Employers Paying Real Living Wage
Many employers voluntarily pay higher:
Accredited Living Wage employers
Often larger companies
Public sector bodies
Some SMEs
How NLW Is Calculated
Low Pay Commission
Role Function Independent body Advises government Research Analyses wage data Consultation Employer/employee views Recommendation Rate for next year
Factors Considered
Factor Consideration Economic conditions Affordability Employment impact Effect on jobs Business impact SME concerns Worker needs Cost of living International comparison Other countries
Your Rights
Employer Must Pay NLW
Requirement Detail At least NLW For hours worked Correct age rate Based on your age No deductions below That take you under NLW Records Must keep
What's Included in NLW
Counts Doesn't Count Basic pay Tips Incentive pay Premium payments Bonuses Benefits in kind Commission Overtime premium
Common Issues
Being Paid Less Than NLW
Situation Action Check calculation Are you underpaid? Raise with employer Give them chance Contact ACAS For advice Report to HMRC If not resolved
Wrong Age Rate
Issue Solution Getting 18-20 rate at 21 Inform employer Not updated on birthday Request correction Employer refuses Report to HMRC
Salary Below NLW
Check Calculation Annual salary Divide by hours worked Compare to NLW £11.44 × hours If below May be underpayment
Sectors and NLW
Impact by Sector
Sector NLW Impact Retail Significant wage bill Hospitality Major employer of young Care Funding pressures Agriculture Often affected
Compliance Challenges
Challenge Common In Working time calculation Hospitality Deductions Retail Salaried workers Various Piece rates Agriculture
Planning for NLW Changes
For Employers
Action When Check rates When announced Budget For increases Update payroll Before April Communicate To employees
For Workers
Action Why Know current rate Ensure compliance Check after April New rate applies Age transitions Rate changes Review payslip Verify correct rate
Future of NLW
Government Target
Goal Target Previous target Two-thirds of median earnings Future Continued increase Age Already lowered to 21 Possible Further reduction in age threshold
Trend
Direction Expected Rate Increasing Age threshold May reduce Enforcement Strengthening
Getting Help
If Underpaid
Contact For ACAS Advice HMRC Enforcement Citizens Advice General help Union If member
Useful Resources
Resource Information gov.uk Official rates and rules ACAS Guidance Low Pay Commission Reports and analysis Living Wage Foundation Real Living Wage
Frequently Asked Questions
What is the National Living Wage? The National Living Wage is the highest band of the National Minimum Wage, applying to workers aged 21 and over. From April 2024, it's £11.44 per hour. It's a legal minimum - employers must pay at least this rate.
What's the difference between NLW and Real Living Wage? The National Living Wage is the government's legal minimum for 21+. The Real Living Wage is a voluntary higher rate (£12.00, £13.15 in London) calculated by the Living Wage Foundation based on living costs. Employers choose to pay it - it's not required by law.
At what age do you get the National Living Wage? From April 2024, you qualify for the National Living Wage from age 21 (previously 23). The change means more young workers receive the highest rate. Below 21, you're entitled to lower NMW rates. Disclaimer: This information is for general guidance only and does not constitute legal advice. Employment law is complex and changes frequently. For specific situations, consult ACAS, a qualified employment lawyer, or HR professional.