From 1 April 2025, the National Minimum Wage (NMW) and the Apprenticeship National Minimum Wage (ANMW) will increase, following the Chancellor’s announcement in the Autumn Budget.
Notably, the apprentice wage will rise from £6.40 to £7.55 an hour, while the national minimum wage for 18- to 20-year-olds will increase by £1.40 to £10 per hour – the largest recorded increase for this age group.
Minimum Wage Rates from 1 April 2025
| Per Hour Rate | Annual Increase | Percentage Increase | |
|---|---|---|---|
| National Living Wage (21 and over) | £12.21 | £0.77 | 6.7% |
| 18- to 20-year-old national minimum wage | £10.00 | £1.40 | 16% |
| 16- to 17-year-old national minimum wage | £7.55 | £1.15 | 18% |
| Apprentice rate | £7.55 | £1.15 | 18% |
While the rise in the ANMW is welcomed, it still lags behind the NMW, which continues to be a factor discouraging individuals from pursuing apprenticeships.
However, an increasing number of employers are choosing to pay above the ANMW to attract top talent, signalling a shift in employer attitudes towards apprenticeships.
The true cost of the rise in National Insurance Contributions to training providers
In addition to the NMW and ANMW increases, from 6 April 2025, UK employers will also face a rise in National Insurance Contributions (NICs). The rate will increase from 13.8% to 15%, and the secondary threshold – the point at which employers begin paying NICs – will drop from £9,100 to £5,000 per year.
This rise in NIC will impact training providers significantly, increasing operational costs. Some local providers have expressed concerns that these rises could negatively affect their ability to continue offering local training programmes.
While the Department for Education (DfE) has earmarked additional funding to support schools and colleges, Universities (HEIs) and Independent Training Providers (ITPs) are excluded from this support package, raising concerns about the fairness of funding distribution.
The Devon & Cornwall Training Providers Network (DCTPN) is currently conducting a survey among its HEI and ITP members to gauge the true impact of these financial changes. Early findings indicate that training providers may be forced to make difficult business decisions regarding future investments, staffing, and pay.
One provider commented: “We are seeing increasing costs but no increase in the funding we receive. This cannot continue. We are expected to deliver quality training and skills to support the government’s vision of skilling people and getting them into work, but we are not being given the support to do so.”
Another provider highlighted the direct financial burden: “We have estimated that the upcoming changes to national insurance will cost us an additional £80,000 across the 100 staff we employ. We will need to absorb these costs, which will limit our capacity to grow and help more of the local community.”
The DCTPN will share its findings with the DfE and other key agencies to ensure that the concerns of training providers are acknowledged and addressed in future policy decisions.
