What is the Minimum Wage (National Living Wage)?
The National Living Wage is the legal minimum hourly pay for workers aged 21 and over — £12.21 in 2025/26, rising to £12.71 from April 2026 — with lower rates for younger workers and apprentices.
The rates
From April 2025: £12.21 an hour for those 21 and over (the National Living Wage), £10.00 for 18–20-year-olds, and £7.55 for 16–17-year-olds and apprentices. From April 2026 these rise to £12.71, £10.85 and £8.00. A full-time worker (37.5 hours) on the NLW earns about £23,800 a year in 2025/26 — comfortably above the frozen £12,570 tax-free allowance, meaning minimum-wage workers now pay roughly £2,800 a year in tax and NI (check the exact figure with the take-home pay calculator).
How the rates are set
The independent Low Pay Commission — economists, unions and employers — recommends rates each autumn. Since 2024 its remit includes the cost of living, and the government has directed it to narrow the 18–20 gap, aiming eventually for a single adult rate from 18. The UK minimum wage is now among the highest in the developed world relative to median pay (around two-thirds), which is precisely what worries some economists: each rise is a live experiment in how high it can go before jobs or hours are cut. So far, study after study has found smaller employment effects than predicted.
Why it matters now
The minimum wage interacts with everything else on this site: fiscal drag taxes an ever-larger slice of it, Universal Credit tapers away as it rises, and employer National Insurance at 15% makes each hour more expensive to employers than to workers. Politically, all parties back a high minimum wage — the argument is about the employment taxes stacked on top of it.
Plain-English guide for general information only — not financial, legal or tax advice. Rates are 2025/26 unless stated. Last reviewed 5 July 2026.
Frequently asked questions
What is the minimum wage in the UK right now?
For 2025/26: £12.21 an hour for workers 21 and over, £10.00 for 18–20-year-olds and £7.55 for 16–17s and apprentices. From April 2026 the adult rate rises to £12.71.
How much is the minimum wage per year?
A 21+ worker on £12.21 for 37.5 hours a week earns about £23,810 a year before tax — roughly £20,300 after income tax and National Insurance in England, Wales and NI.
Do minimum-wage workers pay income tax?
Yes — since the tax-free allowance was frozen at £12,570 while the minimum wage kept rising, a full-time minimum-wage worker now pays around £2,800 a year in combined tax and NI, a key example of fiscal drag.