National Living Wage update
To ensure compliance with the uplifted National Living Wage (NLW) rates, the NHS Terms and Conditions of Service (TCS) Handbook has been updated today (1 April 2025). All 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.
In October 2024, the government announced an increase to the NLW effective from 1 April 2025 to £12.21.
The government advised NHS Employers that from 1 April 2025, 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. 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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The changes to HCAS are set out below:
Pay point/band
| 2025/26 value (£) including inner London HCAS (20%) | 2025/26 value (£) including outer London HCAS (15%) | 2025/26 value (£) including fringe HCAS (5%) | |||
| Annual rate | Hourly rate | Annual rate | Hourly rate | Annual rate | Hourly rate |
Band 1 (closed) | £29,583
| £15.13
| £28,720 | £14.69 | £25,427 | £13.00 |
Band 2 entry | £29,583
| £15.13
| £28,720 | £14.69 | £25,427 | £13.00 |
Band 2 top | £29,583
| £15.13
| £28,720 | £14.69 | £25,427 | £13.00 |
Band 3 entry | £30,039 | £15.36 | £29,176 | £14.92 | £25,883 | £13.24 |
Band 3 top | £31,088 (no change) | £15.90 (no change) | £30, 225 (no change) | £15.46 (no change) | £26, 958 (no change) | £13.79 (no change) |
No changes to any other pay points will be made at this time. The Electronic Staff Record (ESR) has amended the payroll system to ensure the uplifts occur automatically from today (1 April 2025), preventing the need for any manual intervention.
Read the NLW increase announcement on the GOV.UK website.
Employing organisations will need to ensure the following:
1) Employers will need to ensure they have identified any staff affected by the NLW increase and ensure their pay remains compliant. This may include:
a) ensure national minimum wage rates are maintained for any staff impacted by salary sacrifice arrangements
b) ensure rates for bank workers under local arrangements are uplifted in line with the national living wage, as a minimum
c) ensure 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. Employers have reviewed ESR user notice and identified any local or manual interventions which may be required to ensure pay for all affected staff is amended.
3. Employers have communicated the position with all affected staff, which may have included:
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 has been updated to reflect the above changes.
