April this year saw national minimum wage (NMW) increase by 6.7% compared to 2024, to £12.21.
Furthermore, in recent years the age bands for wage rates have also changed. In April 2020, the highest rate was for those aged 25 and over however, since April last year, the highest rate is now for those aged 21 and over.
In October last year, it was revealed the increase in the 18 to 20 year old rate narrowed the gap between that and the national living wage (NLW), in anticipation of the adult rate being extended to 18 year olds in future years.
| From | Hourly rate | % change since previous year | Age bracket |
|---|---|---|---|
| April 2025 | £12.21 | +6.73% | 21 and over |
| April 2024 | £11.44 | +9.79% | 21 and over |
| April 2023 | £10.42 | +9.68% | 23 and over |
| April 2022 | £9.50 | +6.62% | 23 and over |
| April 2021 | £8.91 | +2.18% | 23 and over |
| April 2020 | £8.72 | +6.21% | 25 and over |
That means since April 2020, when the hourly rate for those aged 25 and over was at £8.72, wages are now 40% more at £12.21 an hour at the highest rate and for younger employees - 21 and over compared to 25 and over five years ago.
In 2024, the hike was the largest in the last half a decade at 9.79% and in the year prior, it was a similar percentage at 9.68%.
Enormous pressure
While this year was the third highest rise at 6.73%, 2022 was just behind at 6.22% and April 2020 at 6.21% while 2021 was the lowest in recent times at 2.18%.
Earlier this month (August), the Government published its remit for the Low Pay Commission (LPC) on NLW rates from April 2026.
The LPC suggested NLW could increase to £12.71 - a rise of 4.1% from the current rate, with a projected range between £12.55 and £12.86. If the latter was in place, this would be a rise of 5.3% from the current rate.
The continuous steep rises in wages and narrowing of the age bands place significant financial strain on businesses, particularly those employing young workers, highlighted the British Institute of Innkeeping (BII) chief executive Steve Alton.
He warned this could discourage hiring inexperienced staff, affect morale and be a threat to the sector’s role in supporting youth employment.
“In addition to the steep rise in NMW rates, the reduction of the bands for 21 to 25-year-olds, and the proposal from the LPC for the removal of the bands for adults altogether, puts enormous pressure on our sector – one that supports huge levels of employment for young team members," Alton said.
“The incentive to employ an 18-year-old, with no work experience will simply disappear, leaving students and those who want to learn on the job instead via a traditional academic route at a severe disadvantage.”
Value threat
He urged the Government to recognise the impact of higher wages on the sector and to invest in small businesses.
Alton added: “Staff who have already gained experience will now be potentially on the same or very similar wages to a brand new starter, who they will likely have to help train and support, causing morale issues and forcing employers to either choose not to employ young people, or raise salaries significantly for those with a richer life experience. Something they can ill afford to do since April this year.
“Our sector supports social mobility like no other, offering training and development, not to mention building confidence, in our young people. This approach threatens that huge value to the next generation, one that has already suffered through the impact of the Covid pandemic.
“[The] Government must recognise the knock on effect of forcing employers to shoulder the burden of higher wages and invest in our small businesses to allow them to nurture and grow our talent.”
