Minimum wage set to rise by 6% next year – what you need to know

There’s some good news expected for over a million workers in low-paid jobs. Starting in 2025, the minimum wage is set to increase by 6%.  

Chancellor Rachel Reeves is expected to announce the change in tomorrow’s budget (30 October).  

The rise is more than the current rate of inflation – the general increase in prices of goods and services – which is a pleasant surprise for many. 

What is the minimum wage? 

The minimum wage is the least an employer can legally pay you if you work in the UK, depending on your age. For those over 21, this is called the national living wage. If you’re under 21, you receive the national minimum wage.  

These rates go up every year on 1 April. 

Most workers are entitled to the minimum wage, but some exceptions include: 

• prisoners 

• people living and working in religious communities 

• members of the armed forces 

• company directors 

• people on work experience 

• trainees shadowing someone at work 

• those who haven't reached school-leaving age 

• volunteers 

• self-employed individuals 

• people on a Jobcentre Plus work trial for up to six weeks 

Current minimum wage rates 

Right now, the minimum wage rates are: 

• 21 and over: £11.44 per hour 

• 18 to 20: £8.60 per hour 

• Under 18: £6.40 per hour 

• Apprentice: £6.40 per hour 

What’s the real living wage? 

The real living wage is different from the minimum wage. It’s a voluntary payment for workers over 18 whose employers are signed up with the Living Wage Foundation. This wage is based on what a full-time worker needs to cover essential costs like bills, food and clothing. 

Currently, the real living wage rates are: 

• outside London: £12.60 per hour 

• inside London: £13.85 per hour 

The government is also looking to make the national minimum wage the same for all adults, regardless of their age.  

The rate change has been welcomed by many who fight against poverty. 

Paul Nowak, general secretary of the Trade Union Congress, said: “At a time when the cost of living is still very high the lowest paid would really benefit from a decent increase in the minimum wage. We know that low-paid workers spend more of their cash in their local economies. So, any increase in their spending power will benefit local firms too.” 

Nye Cominetti, an economist at the living standards thinktank the Resolution Foundation, added: “Millions of low earners can expect good news when the chancellor announces the minimum wage increase.” 

How to check your wage 

You can use the minimum wage calculator to find out if you're being paid the correct national minimum wage or national living wage. 

What to do if you think you’ve been underpaid?  

• If you believe you’re not being paid the right amount, you can make a complaint.  

• If you feel comfortable doing so, you may want to speak to the employer in question, to see if the issue can be resolved quickly and amicably.  

• If you don’t feel comfortable raising the issue with an employer, you can ring the confidential Acas helpline for help solving a payment dispute.  

• You can make a complaint to HMRC. 

• Or make a claim to an employment tribunal.  

Stay updated 

Meanwhile, we’ll keep you informed about the budget announcements this week and how these changes might affect your finances.