From 2025, the national minimum wage for 18 to 20-year-olds will begin to rise, though the increase will not happen instantly. In line with Government policy, the Low Pay Commission has announced an interim plan to start aligning the current young person’s rate of £8.60 with the National Living Wage (NLW). This move aims to eliminate age-based variations in minimum wage rates.
As part of this effort, 18 to 20-year-olds can expect larger wage increases than those earning the NLW, which is currently £11.44 per hour. Projections indicate that the NLW could rise 5.7% to £12.10 by April 2025. For 2024/25, estimates suggest a range for the NLW between £11.82 and £12.39, with £12.10 being the most likely figure due to strong wage growth.
The Low Pay Commission will continue gathering evidence on business competitiveness, the labour market, and economic impacts before submitting its final recommendations to the Government by the end of October 2024. Once approved, these changes will take effect from April 2025.
The Commission noted that should current economic trends continue, the wage increase necessary to maintain the “two-thirds bite” (the portion of the median wage) would surpass inflation expectations, with this standard serving as the minimum threshold for their recommendations.
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