Real living wage to rise to at least £12.60 an hour – here's what you need to know

The rate change was first announced on 23 October 2024, though employers have until 1 May 2025 to implement it. You can check whether your employer is one of the 15,000 participating companies on the Living Wage Foundation website.

According to campaign group National Living Wage Foundation, which sets the rates, this increase is "vital" for many low paid workers who are still struggling with the impact of rising prices. Its latest research shows that over a third (39%) of low paid workers have used a food bank in the last year, and almost one in three (32%) have skipped meals for financial reasons.

Martin Lewis: Why employers should sign up to the REAL living wage

At MoneySavingExpert.com (MSE), we don't use the term 'national living wage' because it isn't really a living wage – it's the lowest amount that employees aged 23 or over can legally be paid.

Below, MSE founder Martin Lewis explains the importance of the real living wage and why employers should sign up. The video is from 2023, so the figures have changed – but the message still stands.

A full-time worker earning the new real living wage will get £2,262 more a year than a worker on the current national minimum wage, according to Living Wage Foundation. In London, they would earn £4,700 more than a worker on the national minimum wage.

The national minimum wage will rise by 6.7% from April 2025

From 1 April 2025, the minimum wage paid to workers aged 21 and over will rise from £11.44 an hour to £12.21 an hour, an inflation-busting 6.7% increase, as announced by Chancellor Rachel Reeves in her Autumn Budget.

This is the first time the Low Pay Commission (LPC), which advises the Government on what to set the minimum wage to, has factored the cost of living into its recommendation. However, the new minimum wage will still be lower than the real living wage.

For those aged between 18 and 21, the rate will increase by a record-breaking 16.3% from £8.60 to £10. This is part of the Government's plan to make the minimum wage the same for everyone regardless of age, which it says it's doing by raising the rates by a larger percentage for 18- to 20-year-olds in order to "narrow the gap" over time. For the full list of new rates, see our National minimum wage guide.