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Minimum Wage vs Living Wage UK: What's the Difference in 2025?
salary6 min read2026-06-14
The difference between minimum wage and living wage is a common source of confusion. This guide explains all three wage standards in the UK and how they affect your take-home pay.
The Three Wage Standards
The UK has three main wage benchmarks:
- National Minimum Wage (NMW): The legal minimum for workers under 23
- National Living Wage (NLW): The legal minimum for workers aged 23 and over (set by the government)
- Real Living Wage: A voluntary higher rate based on actual living costs (set by the Living Wage Foundation)
2024 Rates
From April 2025, the rates are:
- National Living Wage (23+): £11.44 per hour
- National Minimum Wage (21-22): £11.44 per hour (equalised with NLW)
- National Minimum Wage (18-20): £8.60 per hour
- National Minimum Wage (Under 18): £6.40 per hour
- Apprentice Rate: £6.40 per hour
- Real Living Wage (UK): £12.00 per hour
- Real Living Wage (London): £13.15 per hour
What Do These Mean for Your Annual Salary?
At 40 hours per week, 52 weeks per year:
- National Living Wage (£11.44): ~£23,795 per year
- Real Living Wage UK (£12.00): ~£24,960 per year
- Real Living Wage London (£13.15): ~£27,352 per year
Take-Home Pay Comparison
On the National Living Wage (£23,795 per year), your take-home pay in the UK would be approximately £20,500 after tax and NI. This includes the standard Personal Allowance meaning only about £11,225 of your income is taxable.
Use our salary calculator to check the take-home pay for any wage rate or annual salary.