What is the National Living Wage?
The National Living Wage affects millions of workers across the UK, yet it’s still widely misunderstood. Each year, changes to the rate make headlines — but many people aren’t sure whether they qualify, how much they should actually be earning, or what the increases mean for their take-home pay.
With the cost of living remaining high, even small hourly increases can make a noticeable difference to weekly and monthly income. But headline rates don’t tell the full story. Factors such as age, employment status, hours worked, tax, National Insurance and whether you receive tips or bonuses all affect what ends up in your bank account.
Key takeaways
- The National Living Wage (NLW) is the legal minimum hourly pay employers must offer most workers aged 21 and over in the UK.
- It’s higher than many other minimum wage bands and rises each year, most recently confirmed to £12.71 from April 2026.
- Workers under 21, apprentices, zero-hours staff and London workers are treated differently under wage and voluntary Real Living Wage rules.
- Take-home pay depends on taxes and National Insurance - earning the NLW doesn’t mean all the gross wage ends up in your pocket.
In this guide, we explain what the National Living Wage is, how it differs from the National Minimum Wage, and how much you should be paid in 2025 - with a look ahead to the increase coming in April 2026 following the Autumn Budget.
We also break down real-world examples for full-time and part-time workers, compare National Living Wage pay with average UK salaries, and explain how the statutory rate compares with the London Living Wage.
- What is the National Living Wage?
- National Living Wage vs National Minimum Wage: what’s the difference?
- What is the National Living Wage rate right now?
- National Living Wage increase
- National Living Wage rates by age: 2025 and 2026
- How much is NLW per week, month and year?
- National Living Wage take-home pay
- Does the National Living Wage include tips, commission, bonuses and overtime?
- Apprentices: what’s the apprentice rate and when does it apply?
- London Living Wage vs National Living Wage
- Does NLW apply to zero-hours contracts?
What is the National Living Wage?
The National Living Wage is the compulsory hourly wage that most workers aged 21 and over must be paid by law in the UK.
It’s set by the Government following annual recommendations from the Low Pay Commission and aims to provide a higher base pay level than older minimum wage bands.
National Living Wage vs National Minimum Wage: what’s the difference?
Both the National Living Wage and National Minimum Wage are minimum rates that can be paid to workers, but they apply at different ages and stages of work life.
The National Living Wage (NLW) applies by law to workers aged 21 and above.
The National Minimum Wage (NMW) covers all other adult workers (eg. those aged under 21 and apprentices).
Both are legal entitlements, but Real Living Wage rates are voluntary and often higher, especially in London.
Most employees and workers aged 21 and over in Great Britain are legally entitled to the NLW.
But not everyone qualifies:
- Self-employed contractors and freelancers set their own rates.
- Family-run companies may have specific exemptions (eg. paying family members).
- Some trainees and volunteers aren’t automatically covered.
Eligibility depends on employment status and hours worked — if in doubt, check gov.uk guidance.
What is the National Living Wage rate right now?
As of April 2025, the National Living Wage is £12.21 per hour.
Employers are legally required to pay this rate to workers aged 21 and over.
National Living Wage increase
Following the Autumn Budget 2025 and Low Pay Commission recommendations, the National Living Wage will rise to £12.71 per hour from 1 April 2026 for workers aged 21+.
This rise reflects a 4.1% increase and will boost earnings for millions of low-paid workers.
It means someone working full time hours on the National Living Wage will see their annual pay increase by nearly £1,000.
National Living Wage rates by age: 2025 and 2026
The National Living Wage is for workers aged 21 and over, and the minimum wage is the minimum that can be paid to those under 21 and apprentices. While the living wage is a flat rate, the minimum wage gradually increases with age.
| Age group | Wage type | From April 2025 | From April 2026 |
|---|---|---|---|
| 21 and over | National Living Wage | £12.21 | £12.71 |
| 18–20 | National Minimum Wage | £10.00 | £10.85 |
| 16–17 / Under 18 | National Minimum Wage | £7.55 | £8.00 |
| Apprentice | Apprentice rate | £7.55 | £8.00 |
How much is National Living Wage per week, month and year?
We’ve broken down how much a worker on the National Living Wage will make per week, month and year, depending on whether they work full time or part time hours.
A full time worker on the National Living Wage in 2025 will earn £23,816 a year. In 2026, this increases to £24,784.76 – almost £1,000 more.
The median average UK salary is £39,039 according to our research, or £17.14 per hour.
| Hours worked | Rate year | Per week | Per month | Per year |
|---|---|---|---|---|
| 37.5 (full-time) | 2025 (£12.21) | £458.00 | £1,984.67 | £23,816 |
| 30 (part-time) | 2025 (£12.21) | £366.00 | £1,586.00 | £19,032 |
| 15 (part-time) | 2025 (£12.21) | £183.00 | £793.00 | £9,516 |
| 37.5 (full-time) | 2026 (£12.71) | £476.63 | £2,065.40 | £24,784.76 |
| 30 (part-time) | 2026 (£12.71) | £381.30 | £1,652.30 | £19,827.60 |
| 15 (part-time) | 2026 (£12.71) | £190.65 | £826.15 | £9,913.80 |
National Living Wage take-home pay: what you’ll actually receive
The National Living Wage is still subject to Income Tax and National Insurance, unless you earn below the personal allowance threshold (£12,570/year).
You may pay Class 1 National Insurance once earnings exceed the threshold.
Actual take-home depends on your total annual earnings, tax code and deductions.
After these two deductions a typical worker would take home:
| Hours worked | Gross pay per year | Income Tax | National Insurance | Estimated take-home |
|---|---|---|---|---|
| 37.5 (full-time) | £23,816 | £2,249 | £900 | £20,667 |
| 30 (part-time) | £19,032 | £1,292 | £517 | £17,223 |
| 15 (part-time) | £9,516 | £0 | £0 | £9,516 |
What this means in practice:
- A full-time NLW worker typically takes home just over £20,600 a year, or around £1,720 a month.
- A 30-hour-a-week worker keeps roughly £17,200 a year, as they pay less tax and National Insurance.
- Someone working 15 hours a week on NLW usually pays no Income Tax or National Insurance at all, because earnings fall below the thresholds.
These calculations do not include pension contributions, which you may or may not opt out of.
Pension contributions are a total of 8% but a minimum of 3% is paid for by your employer with workers funding the rest (it’s taken out of your pay at source). Workers aged 22 and above earning more than £10,000 a year must be enrolled into a workplace pension, but everyone has the option to opt out.
You can read more about opting out of your workplace pension here.
Does the National Living Wage include tips, commission, bonuses and overtime?
Legally employers must pay at least the National Living Wage for all hours worked, bonus and regular overtime included.
Tips and gratuities only count if they’re paid through payroll and are contractual.
So if your employer tries to count tips towards the National Living Wage to reduce wages, that’s usually not allowed unless correctly administered through payroll.
Apprentice minimum wage
Statutory wage rules set a separate minimum wage for apprentices which is £7.55 in 2025, rising to £8.00 from April 2026.
This applies to apprentices under 19, or those 19+ in their first year. After the first year, apprentices aged 19+ are entitled to the age-based rate (for example, if they’re aged 21, the National Living Wage).
London Living Wage vs National Living Wage
The London Living Wage is voluntary and is set independently from the Government to reflect the increased living costs associated with the capital.
Similar to the UK Real Living Wage, both are set by the Living Wage Foundation, based on the actual cost of living, not government policy.
The London Living Wage is £14.80 per hour for 2025/2026.
The current amount was announced in October 2025 and employers have until 1 May 2026 to implement this rate.
In addition, the UK Real Living Wage for outside the capital is £13.45.
Does the National Living Wage apply to zero-hours contracts?
Yes, if you are classed as a worker under UK employment rules, zero-hours contracts still mean you must be paid at least the NLW for every hour you work. Being on a zero-hours contract doesn’t reduce your legal entitlement.
Summary
The National Living Wage is the cornerstone of minimum pay in the UK for workers aged 21+ and rises regularly to reflect earnings and cost pressures.
From April 2026, the rate will increase to £12.71 per hour.
For a full time worker this is the equivalent of a salary of £23,816 a year.
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