National living wage to increase in April 2025

National Living Wage to increase to £12.21 in April 2025

On 29 October 2024, the Government announced that the National Living Wage (NLW) will increase from 1 April 2025 as follows:

The planned increase in the National Living Wage (NLW) from £11.90 to £12.21 per hour in April 2025 will result in higher weekly wages for workers.

Many industries will be impacted by this increase, especially since it has only been a year on from the April 2024 changes. To provide a clear picture of the impact of this increase, let’s break down how the wage increase will affect employees within the racing industry under SOC Code 6129 Animal Care Services Occupations, working a 47-hour week.

1. Current NLW (April 2024) - £11.90 per Hour

Under the current NLW of £11.90 per hour:

• Hourly Rate: £11.90
• Weekly Hours: 47 hours
• Weekly Pay:
  £11.90 × 47 = £559.30 per week

So, at the current rate, a worker in SOC Code 6129 working 47 hours per week will earn £559.30 before taxes.

2. Future NLW (April 2025) - £12.21 per Hour

With the planned increase in the NLW to £12.21 per hour in April 2025:

• Hourly Rate: £12.21
• Weekly Hours: 47 hours
• Weekly Pay:
  £12.21 × 47 = £573.87 per week

Therefore, in April 2025, a worker in SOC Code 6129 working 47 hours per week will earn £573.87 before taxes.

3. Comparison: Current vs. April 2025

Here’s a quick comparison of the weekly pay before tax:

• Current Weekly Pay (at £11.90 per hour): £559.30
• Future Weekly Pay (at £12.21 per hour): £573.87
• Difference: £573.87 - £559.30 = £14.57 more per week

So, workers in SOC Code 6129 who are working 47 hours per week will see an increase of £14.57 in their weekly pay when the NLW rises to £12.21 per hour in April 2025.

4. Annual Impact (For a Full Year’s Work)

Let’s now look at how this increase will impact annual earnings, assuming the worker works 47 hours per week for 52 weeks a year (no time off):

• Current Annual Pay (at £11.90 per hour):
  £11.90 × 47 hours × 52 weeks = £29,146.60 per year
• Future Annual Pay (at £12.21 per hour):
  £12.21 × 47 hours × 52 weeks = £29,857.24 per year
• Difference in Annual Pay:
  £29,857.24 - £29,146.60 = £710.64 more per year

So, the worker would earn £710.64 more per year as a result of the increase in the NLW to £12.21 per hour.

5. Tax and National Insurance Considerations

The gross pay increase of £14.57 per week (or £710.64 per year) is the amount the worker would receive before tax and National Insurance contributions. The actual take-home pay increase would be lower, as income tax and National Insurance (NI) contributions would be deducted. The worker’s net pay will depend on the specific tax code and NI class.

However, if we assume the worker falls under the standard income tax and National Insurance bands, they can expect to see a moderate increase in their net pay due to the higher wage rate, though the exact amount will depend on individual circumstances (e.g., tax code, any deductions, pension contributions, etc.).

Summary of Key Points

• Current NLW (2024): £11.90 per hour
  • Weekly (47 hours): £559.30
  • Annual (52 weeks): £29,146.60
• NLW Increase (2025): £12.21 per hour
  • Weekly (47 hours): £573.87
  • Annual (52 weeks): £29,857.24
• Weekly Increase: £14.57
• Annual Increase: £710.64

Workers in SOC Code 6129 will see an increase in both their weekly and annual earnings as the National Living Wage rises, helping to offset the ongoing pressures of inflation and the cost of living. The exact impact will vary based on individual tax circumstances, but the increase represents a clear financial benefit for those working in this occupation.

Contact Migrate UK

If you sponsor overseas workers or are thinking about sponsoring and unsure how these changes will affect you, please don't hesitate to contact our immigration specialists at info@migrate-uk.com or tel: 01235 645 800.