The National Minimum Wage (NMW) and National Living Wage (NLW) aren’t the same, but often get mixed up. These two types of wages apply to different people and are based on certain criteria. As both an employee and employer, it’s important to understand the difference between the NMW and the NLW so you stay informed on what you should be receiving and what you should be giving. These rates change on the 1st of April every year and the wages for April 2025 have just been announced.
The National Minimum Wage
This wage refers to the minimum amount you have to be paid as a younger worker, aged 16-20 years old. Currently for 18–20-year-olds, the NMW is £8.60, but this will increase to £10 an hour in April 2025. For 16–17-year-olds, the NMW is £6.40 and will be increasing to £7.55 in April 2025.
There is a separate apprentice rate which applies to individuals who are under 19 years old, or who are 19 in the first year of an apprenticeship. This rate will also go from £6.40 to £7.55 in April 2025.
If an employer is found to be paying the incorrect minimum wage to their employees, HMRC could take them to court. If you’re an employee who knows they’re being underpaid, you can raise a grievance against your employer.
The National Living Wage
This wage is also a minimum amount that an employee must be legally paid. However, this is applied to people only aged 21 and over. The rates for the NLW are set by the government annually, based on the advice of the Low Pay Commission, who are an independent group. Currently the NLW is £11.44 an hour, but this has been set to be increased to £12.21 in April 2025.
Similar to the NMW, this is a law-mandated wage that companies are at risk of being taken to court for if it’s found they aren’t paying this correctly.
Are There Exceptions to These Rates?
There are a select number of people that are not legally entitled to the NMW or the NLW. These individuals are:
- Self-employed people
- Directors of a company
- Prisoners
- Members of the armed forces
- Volunteers
- People working and living in a religious community
These are the only people who are exceptions, with all other workers in the UK eligible to receive either the NMW or NLW depending on their age.
The Real Living Wage
The Real Living Wage is separate from the NMW and the NLW as it is an unofficial hourly rate of pay that’s overseen by a charity, the Living Wage Foundation. The rate for this wage is calculated by the Resolution Foundation independently. This Real Living Wage is for UK employees who are 18 years old and over. However, this is not a legal requirement like the NMW or NLW, so businesses can choose to pay this or not.
If you think you’ve been paid unfairly and need advice on how to navigate the situation, Premier Legal’s expert legal team can help. Raising a grievance against your employer can be daunting, which is why we’re here to support you through it. For employment law knowledge and advice get in touch with us to speak to a friendly member of staff.
