Minimum Wage Rises:

From 1 April 2025, the National Minimum Wage for workers aged 21 and over will increase to £12.21 per hour. This pay rise aims to ease the cost of living and bring UK wages closer to a genuine “living wage”. However, as wages increase, the increased National Insurance contributions will place greater financial pressure on employers, especially small and medium-sized enterprises (SMEs). As a result, employers may be forced to reconsider recruitment strategies or salary structures.

Details of the Wage Increases:

• Ages 21 and over: Increasing from £11.44 to £12.21 per hour (+6.7%)
• Ages 18–20: Rising from £8.60 to £10.00 per hour
• Apprentices: Increasing from £6.40 to £7.55 per hour — the highest percentage increase among all categories

National Insurance Contribution Changes:

From 6 April 2025, the employer’s National Insurance rate will rise from 13.8% to 15%. Additionally, the threshold for starting contributions will drop from £9,100 to £5,000.

This will significantly increase the cost of employment. To help mitigate the impact, the government is raising the Employment Allowance for SMEs from £5,000 to £10,500.

Previously, employers were only eligible for this allowance if their total National Insurance liability in the prior tax year was under £100,000. This restriction will now be removed, making more employers eligible for relief.

Example Impact for Employers:

Based on a 37.5-hour work week, businesses will pay an additional £1,501.50 annually for each employee aged 21 or over.

Minimum Wage Compliance & Immigration Implications:

Employers must carefully review staff pay to ensure compliance with the new rates, especially regarding weekly hours and annual salaries.

For instance, an employee working 40 hours per week on a £25,000 annual salary currently earns £12.02 per hour, which will fall below the new minimum wage after 1 April. Employers will need to adjust salaries accordingly.

This also has implications for sponsorship licences, visa renewals and settlement applications under the Skilled Worker or other business immigration routes. Employers must ensure they remain compliant to ensure compliance with all relevant employment laws and policies so to avoid jeopardising their sponsor status.

If you have questions about UK visas, sponsorship, settlement, naturalisation, or education, feel free to book a 30-minute free consultation with one of our experienced solicitors at Sincere Immigration.