National Living Wage update
In order to ensure compliance with the uplifted National Living Wage (NLW) rates, the government has advised NHS Employers that staff in Agenda for Change (AfC) pay bands 1 (closed spot salary) and both pay points of band 2 will receive an advance to the 2025/26 pay award from 1 April.
In October 2024, the government announced an increase to the NLW effective from 1 April 2025 to £12.21.
The entry point of band 3 will also receive an advance of 28p per hour to maintain the differentials with the top of band 2. This is set out in the table below.
| Pay band / pay point | Current (2024/25) rate / hour | Temporary rate from 1 April / hour | Temporary annual salary from 1 April 2025 |
| Band 1 (closed) | £12.08 | £12.36 (+28p) | £24,169 |
| Band 2 entry | £12.08 | £12.36 (+28p) | £24,169 |
| Band 2 top | £12.08 | £12.36 (+28p) | £24,169 |
| Band 3 entry | £12.31 | £12.59 (+28p) | £24,625 |
| Band 3 top | £13.13 | £13.13 (no change) |
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No changes to any other pay points will be made at this time. The Electronic Staff Record (ESR) will amend the payroll system to ensure the uplifts occur automatically from 1 April 2025, preventing the need for any manual intervention. Details about this will be provided in the forthcoming ESR release communication.
Read the NLW increase announcement on the GOV.UK website.
Next steps
The next steps for employing organisations will be to:
1) Identify any staff affected by the NLW increase and ensure their pay remains compliant. This may include:
a) ensuring national minimum wage rates are maintained for any staff impacted by salary sacrifice arrangements
b) ensuring rates for bank workers under local arrangements are uplifted in line with the national living wage, as a minimum
c) ensuring staff undertaking an apprenticeship receive appropriate uplifts in line with the statutory provisions. This will include consideration of Annex 21 (paragraph 4) provisions of where staff are employed under these arrangements.
2. Review ESRs forthcoming release communication (once available) and identify where any additional local or manual interventions may be required to ensure pay for all affected staff is amended.
3. Communicate the position with all affected staff, which may include:
a) making clear that the uplift should be seen as an advance to the 2025/26 pay award
b) highlighting where any interaction with salary sacrifice may occur.
The NHS Terms and Conditions of Service (TCS) Handbook and pay advisory notice will be updated to reflect the above changes and issued on the 1 April 2025.
