October 2025 Budget
The National Minimum Wage and Employers NI will increase in April 2025
The Chancellor, Rachel Reeves, announced in the October 2025 Budget that the National Minimum Wage will increase by over 6% in April 2025. Employers National Insurance will also increase and the threshold for when Employers National Insurance becomes payable will reduce.
National Minimum Wage Rates
The Government have confirmed that they have accepted the Low Pay Commission’s recommendations on national minimum wage rates to apply from April 2025. For the first time, the Low Pay Commission considered the ongoing cost of living crisis and inflation trends projected up to March 2026. The adult rate is increasing by 6.7% and to bring the young persons rate closer to the adult rate that will increase by a massive 16.3%. From April 2026 the gap between the adult and young workers rate will be closed and giving all workers the same minimum rate of pay regardless of age.
The National Minimum Wage Rates will increase as follows:
| Age Range | April 2024 Rate | April 2025 Rate | Rate of Increase | Annual Pay |
| 21 and over | £11.44 | £12.21 | £0.77 (6.7%) | £25,396.80 |
| 18 – 20 | £8.60 | £10.00 | £1.40 (16.3%) | £20,800.00 |
| 16 – 17 | £6.40 | £7.55 | £1.15 (17.9%) | £15,704.80 |
| Apprentices | £6.40 | £7.55 | £1.15 (17.9%) | £15,704.80 |
Figures in the Annual Pay column are based on an employee working 40 hours per week.
Accommodation Offset
The accommodation offset is the limit on how much an employer can charge a minimum wage worker for accommodation. The rate will be £10.66 per day (increase from £9.99) from April 2025.
Employers NI
Employers National Insurance will increase by 1.2% to 15%.
The threshold for paying employer’s National Insurance will reduce from £9,100 to £5,000 per annum.
The freeze on Income Tax thresholds will continue through to 2028 as agreed by the previous government.
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