Q. My client is a hairdresser with an attached training academy, and they employ several people on national minimum wage (NMW) and national living wage (NLW), some of which are apprentices working in the training part of the business.
They are thinking about the practical implications for their business, especially as recently they have taken on more full-time employees as they expand the academy. They have asked me about the new rates coming in April, as they have heard the law has changed. Is this right?
- Whilst strictly speaking yes this is true, this will not necessarily be new information for your client. The new NMW and NLW rates were announced last Autumn, however for them to come into force, legislation had to be put before parliament to confirm this. This has now happened, and it confirms the rates are the same as announced last Autumn.
- Statutory rates and national minimum wage (NMW) and national living wage (NML) are reviewed annually, and usually increased. For 2025/26, for the first time, these rates now take into account the cost of living and inflation following a change to the remit of the Low Pay Commission by the government in 2024. The new rates are also the first step to fulfil the government’s plans to align the NMW for 18- to 20-year-olds and NLW and create a new single adult rate. This will however take a number of years to achieve.
The new rates will be as follows, and will apply from 1 April 2025:
- The National Living Wage for those aged 21 and over will rise from £11.44 per hour to £12.21 per hour.
- The National Minimum Wage for 18- to 20-year-olds rises from £8.60 to £10.00 per hour.
- The apprenticeship rate, and for 16- to 17-year-olds rises from £6.40 per hour to £7.55 per hour.
These increases are something your client will need to make careful plans for, as they will significantly increase their costs. Thinking about their full-time staff, below are some examples of the impact this will have.
Example 1: Employee A is 19, working full-time. From April, they will get a pay rise of £1.40 an hour, boosting their pay by £2,500 a year.
Example 2: Employee B is 25, again working full time. From April, their pay will increase by £1,400 per year.
Example 3: Employee C is an apprentice and also works full time. They are getting an 18% increase in their pay, seeing it rise by over £2,050.
Alongside minimum wage increases, pay relating to statutory family related leave is also rising from £184.03 to £187.18 from 6 April 2025 (including statutory maternity, adoption, paternity, shared parental, parental bereavement pay and, for the first time, neonatal care pay for eligible parents of babies born on or after 6 April 2025 who meet the entitlement criteria).
Your client should also know that statutory sick pay will also rise from 6 April 2025 from £116.75 to £118.75.
To find out more about how this will affect your company and employees please contact your KKVMS advisor.