5 min read | 19 October, 2020 By Laura Sands
Updated June 2021. The National Minimum Wage (NMW) and National Living Wage (NLW) are the minimum amount of pay a worker should receive, based upon certain criteria.
By law, employers must pay a minimum amount on average for the hours work by their employees. This is called the:
The National Living Wage was previously for those aged over 25. From 1 April 2021, it also applies to those aged 23 and 24.
As of 1st April 2021, NLW rates start at £4.30 for apprentices and is capped at £8.91 for those aged 25 and over.
The new NLW and NMW rates are set out below. The NLW now applies to all workers aged 23 and over. The previous age of eligibility was 25. This will come down again to 21 by 2024.
Confusingly, the NLW was simply a renaming of the NMW and not truly linked to the cost of living.
The 'Real Living Wage' is calculated independently of the government by the Living Wage Foundation.
The Real Living Wage is a rate that is voluntarily paid by more than 7,000 UK businesses to help their employees meet eveydays needs. It is not a legal requirement.
In the table below, each of the 5 rates listed beneath the National Living Wage are classed as the National Minimum Wage.
The National Minimum Wage and National Living Wage change at the start of April each year.
The difference comes down to the age of an employee.
Workers aged 23 and 24 are now entitled to the lower National Living Wage.