UK Minimum Wage 2025: How It Compares Globally After Record Increase
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Fatima Saif
- . August 22, 2025
- . Update: August 24, 2025 11:21 pm
The UK’s National Minimum Wage (NMW) is set to rise significantly from 1 April 2025, following new government policy to ensure earnings keep pace with the rising cost of living and national wage growth. The headline figure is a 6.7% increase in the National Living Wage (NLW) for workers aged 21 and over, rising from £11.44 to £12.21 per hour.
This boost is part of the government’s target to maintain the NLW at two-thirds of median earnings, in line with Low Pay Commission (LPC) recommendations. It follows years of double-digit wage hikes and places the UK near the top of the global minimum wage rankings, surpassing many other developed countries when adjusted for exchange rates and cost of living.
The change will benefit more than 3 million low-paid workers, with younger employees receiving the most substantial percentage increases.
New Minimum Wage Rates from April 2025
| Category | New Hourly Rate | Increase (£) | Increase (%) |
| National Living Wage (21+) | £12.21 | £0.77 | 6.7% |
| 18–20 Year Old Rate | £10.00 | £1.40 | 16.3% |
| 16–17 Year Old Rate | £7.55 | £1.15 | 18.0% |
| Apprentice Rate | £7.55 | £1.15 | 18.0% |
| Accommodation Offset (daily) | £10.66 | £0.67 | 6.7% |
International Comparison: How the UK Stacks Up
With the 2025 update, the UK’s NLW reaches the equivalent of $15.50 USD/hour (as of August 2025), making it one of the highest statutory minimum wages globally. Here’s how it compares:
| Country | Hourly Minimum Wage (USD equivalent) | Notes |
| UK (2025) | $15.50 | £12.21 for workers aged 21+ |
| France | $12.90 | €11.65/hour before deductions |
| Germany | $13.00 | €12.41/hour (as of July 2024) |
| USA (Federal) | $7.25 | No increase since 2009; many states set higher rates |
| Australia | $15.90 | AUD 24.10/hour (from July 2025) |
| New Zealand | $14.50 | NZD 23.15/hour (as of April 2025) |
| Canada | $11–$15.60 | Varies by province |
This comparison highlights the UK’s commitment to maintaining competitive wage floors while tackling in-work poverty and inflationary pressures.
Wage Growth by Age: A Boost for Young Workers
The 2025 increases are most dramatic for young and entry-level workers:
- 18–20-year-olds will receive £10.00/hour, a 16.3% increase, up from £8.60.
- 16–17-year-olds and apprentices move up to £7.55/hour, up 18% from £6.40.
This marks a significant narrowing of the youth pay gap, aligning with government goals to reduce disparities and boost financial security for younger demographics. Over 1 million young workers are expected to benefit.
Why the 2025 Increase Matters
The Office for National Statistics (ONS) revised median hourly earnings for 2023 to £17.52, rising to £18.64 in 2024. By tying the NLW to two-thirds of median pay, the government targets long-term wage stability. A full-time worker on the 2025 NLW will earn around £25,300 annually, £1,400 more than in 2024.
However, business groups warn that rising wages, in tandem with proposed tax hikes and new labour compliance costs, could strain small employers. UKHospitality forecasts a £1.9 billion wage bill increase in its sector alone.
Despite these concerns, unions and labour economists have welcomed the increase, citing improved living standards and low historical evidence that minimum wage rises lead to significant job losses.
The 2025 wage increase marks a major economic and political milestone. It not only strengthens household incomes but also positions the UK among the top global leaders in minimum wage policy. The challenge ahead lies in ensuring employers, especially SMEs, can absorb the rising costs without compromising jobs, investment, or innovation.
