The UK Government has officially confirmed an increase in the national minimum wage, which will take effect on 28 October 2025. Millions of workers are expected to benefit from this rise, marking one of the largest pay adjustments in recent years. The change is part of a broader plan to improve living standards and respond to the rising cost of living.
What Exactly Is the New Minimum Wage?
The Department for Business and Trade has confirmed that the new wage rates aim to ensure that work always pays. Following recommendations from the Low Pay Commission, this update is intended to support low-income earners while promoting a higher-wage, higher-skill economy.
Why the Minimum Wage Is Increasing
The increase comes as many households face rising costs for essentials like food, rent, and energy. Wage growth had not kept pace with inflation, leaving workers struggling. The 2025 update is designed to protect real incomes and ensure fair compensation across all sectors.
A DBT spokesperson said: “This increase reflects the government’s ongoing commitment to fair pay. By boosting wages now, we’re helping workers cope with the cost of living and strengthening the UK’s long-term economic foundations.”
New Minimum Wage Rates Effective 28 October 2025
The updated rates apply to all age groups and apprentices. The breakdown is as follows:
| Category | Current Rate | New Rate (from 28 Oct 2025) | Increase |
|---|---|---|---|
| National Living Wage (21+) | £11.44 | £11.64 | +£0.20/hour |
| Age 18–20 | £7.49 | £8.10 | +£0.61/hour |
| Age 16–17 | £5.28 | £6.10 | +£0.82/hour |
| Apprentices | £5.28 | £6.50 | +£1.22/hour |
This represents an average rise of 7 to 9 percent, one of the largest annual jumps in recent UK wage policy history.
What the Change Means for Workers
Full-time workers aged 21 or over, working 35 hours per week, will now earn around £364 per week, which is almost £1,700 more annually compared to the previous rate. Key benefits include reduced financial stress, better motivation, higher spending power, and improved staff retention in sectors like social care, hospitality, and retail.
How Employers Should Prepare
The government recommends that employers take steps before the rollout:
- Audit pay structures to ensure all workers receive at least the new minimum.
- Update payroll and HR systems to reflect the new rates.
- Inform employees about the upcoming changes.
- Train HR staff on compliance requirements.
- Review contracts and overtime policies to avoid accidental underpayments.
Failure to comply can result in fines up to 200 percent of underpayments, with a maximum of £20,000 per worker, as well as public disclosure of violations.
Focus on Young Workers and Apprentices
Apprentices and younger employees are seeing the largest increases. Apprentices will earn £6.50 per hour, and employees aged 16–20 will see rises of up to 9 percent. This makes vocational training more financially viable and ensures young workers can cover basic living costs while gaining experience.
Regional Impact Across the UK
The wage applies nationwide, but the effect varies by region:
- North East, Wales, and Northern Ireland: Larger relative increases due to lower average wages.
- London and South East: Smaller increases due to higher living costs. The voluntary London Living Wage continues to guide employers.
Economic and Expert Reactions
The announcement has received widespread praise from trade unions and policy experts. Paul Nowak, General Secretary of the Trades Union Congress, called it “a vital boost for millions of working families and a step toward restoring fairness after years of wage stagnation.”
Some economists caution that wage hikes could lead to slight inflation if businesses pass on costs to consumers, but stronger spending is expected to offset this effect.
Future Outlook
The next minimum wage review is planned for April 2026. The government’s long-term goal is to maintain the National Living Wage at two-thirds of median earnings by 2030, ensuring pay keeps pace with the wider economy.
Frequently Asked Questions
- When do the new minimum wage rates start?
The new rates come into effect on 28 October 2025. - What is the new National Living Wage for adults?
Workers aged 21 and over will earn £11.64 per hour. - Will apprentices and young workers also get a pay rise?
Yes. Apprentices will earn £6.50 per hour, and employees aged 16–20 will see increases of up to 9 percent. - How will businesses be monitored for compliance?
HMRC will enforce the rules with fines, back-pay orders, and public disclosure for employers who fail to comply. - Will the rates change again soon?
The next review is scheduled for April 2026, when adjustments may be made based on inflation and productivity.
Conclusion
The October 2025 minimum wage increase is a significant step for workers across the UK. By raising pay for all age groups, particularly young and entry-level employees, the government aims to reduce inequality, improve living standards, and strengthen the economy. While some small businesses may face challenges, the overall long-term impact is expected to be positive for workers and the wider UK economy.
