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What’s changed with National Living Wage in 2025?

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Brighton, UK
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If you’re working part-time alongside university or just starting out in full-time employment, you’ve probably come across the term National Living Wage. It’s often confused with the minimum wage, but there are key differences that can affect your paycheque.

So, what’s changed in 2025, and why are some big employers getting caught out for not paying it?


National Living Wage vs Minimum Wage

The National Minimum Wage is the lowest legal hourly rate for workers under 21. The National Living Wage is the equivalent for everyone older – and it’s higher.

As of April 2024, the threshold dropped from age 23 to 21, meaning more young people are entitled to the higher rate. For 2025, that’s £11.44 per hour. By comparison, 18-20 year olds get £8.60, so the jump at 21 is significant.

This gives more financial independence and empowerment to GenZ workers, amidst of the cost-of-living crisis it can have a drastic impact on young people’s quality of life.


Why does this matter for Gen Z?

With rising rents, food prices, and student loan repayments, every extra pound makes a difference. Most Gen Z workers are concentrated in hospitality, retail, and service jobs – industries where wage violations and cash in hand work are unfortunately very common.

Many young people enter hospitality, retail, and service jobs because they’re flexible, widely accessible, and often require few qualifications or prior experience.

Being underpaid by just £1 an hour adds up to hundreds lost each year – the opposite of girl maths. That’s money that should be going towards your bills, food, or travel.

Companies failing to pay up

Even though it’s the law, many employers don’t get it right. In 2024, the government named and shamed over 500 companies for underpaying staff. Big names included Lidl, which failed to pay thousands properly due to unpaid working time and deductions.

Turns out Lidl’s slogan ‘Big on quality, Lidl on price’ doesn’t just apply to groceries – it accidentally sums up their staff wages too.

It’s not just small or shady businesses, either. Some of the UK’s biggest corporations have been caught out. While government says staff will be compensated, enforcement is often slow, and workers rarely know how to challenge their employers.


What to expect as an employee

If you’re 21 or older, your legal hourly rate is £11.44. Employers must also ensure you’re paid for every hour worked, including time spent setting up or attending training. Uniform costs or deductions can’t legally bring you below the threshold.

Think you’re being underpaid? You can:

  • Check your payslip against your hours.
  • Use HMRC’s calculator to confirm your rate.
  • Report your employer anonymously if needed.

What’s the Real Living Wage?

Now this is when everything can get a bit more confusing, with wage this and wage that. But hang on with me for just a bit longer!

There’s a catch: the National Living Wage isn’t necessarily enough to live on. The Real Living Wage, set by the Living Wage Foundation, is based on actual living costs – currently £12 an hour across the UK and £13.15 in London.

Over 14,000 employers pay this voluntarily. For Gen Z, who face higher housing costs and insecure contracts, this is the standard that truly reflects everyday expenses.

Extending the National Living Wage to 21+ is progress, but enforcement gaps and rising living costs mean it’s only part of the solution.

Knowing your rights protects you from being short-changed.

For Gen Z workers, fair pay is more than a legal minimum – it’s about dignity and survival in a growing cost-of-living crisis.

Senior Remote Writer Brighton, UK

I’m Flo, (She/Her) a Senior Remote Writer at Thred. I recently completed a Masters in Visual Anthropology, and seek to interrogate the ways digital spaces can amplify marginalised voices in the arts and cultural sectors. Follow me on LinkedIn or ping me some feedback via email.

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