Apprentices will see an 18 per cent bump to the minimum hourly wage next year, the Treasury has announced.
Ahead of the autumn budget tomorrow, chancellor Rachel Reeves said that the apprentice wage will rise from £6.40 to £7.55 an hour from April 2025.
Reeves will also raise the national minimum wage for 18-20-year-olds by £1.40 to £10 – the largest increase in the rate on record.
The move appears to ignore an independent advisory body’s March recommendation that the government should link the apprentice hourly rate to the national minimum wage for over 18s during the first year of their apprenticeship.
Employers pay at least the apprentice minimum wage for apprentices aged 16-18, and for apprentices aged 19 or over in the first year of their apprenticeship. After their first year, apprentices aged over 19 should receive at least the national minimum wage, or the national living wage, depending on their age.
The Low Pay Commission (LPC) undertook a review into abolishing the apprentice minimum wage last year after hearing “widespread” concern that the “low” rate was discouraging people from taking apprenticeships. It recommended to keep the rate but link it to age to narrow the gap between the national minimum wage for apprentices and non-apprentices.
The Treasury also today confirmed a boost to the national living wage from £11.44 to £12.21 an hour, a 6.7 per cent increase. The rate applies to those aged 21 and over, after the age boundary was lowered last year from 23 to 21-years-old.
Last year, the apprentice minimum wage rose by 21 per cent from £5.28 to £6.40.
The government will deliver the 2024 autumn budget tomorrow afternoon – Labour’s first in almost 15 years.
Reeves said: “This government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”
Deputy prime minister Angela Rayner said: “Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”
A government spokesperson claimed the Department for Business and Trade estimate over 3 million workers will directly benefit from the 2025 national living wage increase, nearly 200,000 workers will benefit from the increase to the national minimum wage for 18 to 20-year-olds, and over 130,000 workers will benefit from the uplifts to the rate for apprentices and those aged under 18.
Minimum wage rates from April 1, 2025
| Per hour rate | Annual increase | Percentage increase | |
| National Living Wage (21 and over) | £12.21 | £0.77 | 6.7% |
| 18-20-year-old national minimum wage | £10.00 | £1.40 | 16% |
| 16-17-year-old national minimum wage | £7.55 | £1.15 | 18% |
| Apprentice rate | £7.55 | £1.15 | 18% |
Be interesting to see if unemployment grows in next 6 months!!! Micro business may struggle.
Always concerns me when a government endorses a “living” wage that is generally higher than the legal limit they set for NMW reaks of hypocrassy. I guess it’s to encourage voluntary adherence were possible.
Apprentices will enjoy higher rates but I worry about the impact it may have on take up rates.
Some of the surplus levy monies should be spent on a national scheme to support apprentices who lose their job at no fault who need to complete their apprenticeship.
The majority of Apprenticeship opportunities are with SME’s and it will be interesting to see how this plays out, especially as they are charging the same employers more NI (and reducing the threshold for paying it).
There will soon be a point where employers will just find it easier to recruit skilled staff because the financial benefit / incentive of training someone up will have gone.
You have to admit though that increasing wages (at no cost to the Government), then increasing NI to small employers is a cunning plan worthy of Baldrick.