This story was last updated in April 2026 to reflect new changes to the National Minimum Wage and Living Wage.
What is the difference between minimum wage and living wage?
British employers and staff alike have frequently found themselves confused with the terms Living Wage, National Living Wage and the National Minimum Wage. We wanted to provide some clarification on what they meant.
The National Minimum Wage
The National Minimum Wages (NMW) is exactly as it sounds. It is the minimum pay per hour workers of school leaving age are entitled to by law and is reviewed annually by the government. The correct minimum wage rate for each age group in the UK is different and has been regulated by the Low Pay Commission since 1999.
Of course, workers need to be of school leaving age (16) to receive the benefits of the NMW. The most recent set of changes came into place in April 2026, making the national minimum wage current hourly rates as below:
| YEAR | 21 AND OVER | 18 TO 20 | UNDER 18 | APPRENTICE |
| 2026 | £12.71 | £10.85 | £8.00 | £8.00 |
Apprentice rates of £8 applies to those apprentices aged under 19 or age 19 or over in the first year of their apprenticeship.
The National Living Wage
This is the point where people get confused. Despite using the term ‘Living Wage’, the Government’s National Living Wage (NLW) has nothing to do with it. It’s basically a new minimum wage rate that applies to workers aged 21 and over.
Launched under former chancellor George Osborne in 2015 as a higher statutory minimum wage, the National Living Wage of £7.20 originally applied to workers aged 25 and over. The minimum amounts have increased over the years to help workers with increasing living costs.
The age threshold was lowered in 2021 to include those aged 23 and over, and was again lowered in 2024 to workers aged 21 and over. Workers aged 20 and under continue to receive the minimum wage.
There are a few types of workers who aren’t entitled to the National Minimum Wage or National Living Wage. Those include the self-employed, company directors, volunteers, workers on a government programme and members of the armed forces.
The real Living Wage
The real Living Wage shouldn’t be confused with the government’s National Living Wage, the main difference being that workers aren’t legally entitled to it and it isn’t enforceable by law. Companies can voluntarily adopt it, but know that it means paying a higher wage to staff than they are actually obliged to by law.
Promoted by the Living Wage Foundation and calculated annually by the Resolution Foundation, it’s a benchmark and recommendation based on the actual costs of living now in order to improve living standards.
TUC general secretary Frances O’Grady explained: “Unlike the government’s NLW, the real Living Wage is based on a review of the evidence on what is currently happening to people.”
The real Living Wage recomended by the Living Wage Foundation, which is paid voluntarily by over 15,000 employers in UK currently stands at £13.45 an hour or £14.80 in London.
National Minimum Wage/Living Wage Previous Rates
National Minimum Wage rates have increased year on year since their introduction in 1999:
1999: a rate of £3.60 applied to workers aged 22 and over and £3 for those aged 18-21.
2009: Age 22 and over – £5.80; age 18-21 – £4.83 ; age 16-17 – £3.57.
2019: 25 and over – £8.21; 21 to 24 – £7.70; 18 to 20 – £6.15; under 18 – £4.35; apprentice – £3.90.
2025: 21 and over – £12.21; 18 to 20 – £10; 16 to 17 – £7.55, apprentice – £7.55.
