diff --git a/plinth/notification.py b/plinth/notification.py
index c1be960e0..2711df750 100644
--- a/plinth/notification.py
+++ b/plinth/notification.py
@@ -8,6 +8,7 @@ from django.core.exceptions import ValidationError
 from django.db.models import Q
 from django.template.exceptions import TemplateDoesNotExist
 from django.template.response import SimpleTemplateResponse
+from django.utils import timezone
 from django.utils.translation import gettext
 
 from plinth import cfg
@@ -229,9 +230,11 @@ class Notification(models.StoredNotification):
 
         """
         id = kwargs.pop('id')
+        fields_to_update = kwargs.copy()
+        fields_to_update['last_update_time'] = timezone.now()
         with db.lock:
             return Notification.objects.update_or_create(
-                defaults=kwargs, id=id)[0]
+                defaults=fields_to_update, id=id)[0]
 
     @staticmethod
     def get(key):  # pylint: disable=redefined-builtin
diff --git a/plinth/tests/test_notification.py b/plinth/tests/test_notification.py
index cd72755c0..5e1c3f6d7 100644
--- a/plinth/tests/test_notification.py
+++ b/plinth/tests/test_notification.py
@@ -413,3 +413,28 @@ def test_display_context_body_template(note, user, load_cfg, rf):
     context_note = context['notifications'][0]
     assert context_note['body'].content == \
         b'Test notification body /plinth/help/about/\n'
+
+
+@pytest.mark.django_db
+def test_last_update_time_updates_on_modify():
+    """Test that last_update_time is updated on modify via update_or_create."""
+    # Given a notification is created at time t1
+    t1 = datetime.datetime(2025, 1, 1, tzinfo=datetime.timezone.utc)
+    with patch('django.utils.timezone.now', return_value=t1):
+        Notification.update_or_create(id='timestamp-test', app_id='app',
+                                      severity='info', title='Title')
+
+    first_note = Notification.get('timestamp-test')
+    assert first_note.last_update_time == t1
+
+    # When the same notification is updated at later time t2
+    t2 = t1 + datetime.timedelta(minutes=5)
+    with patch('django.utils.timezone.now', return_value=t2):
+        Notification.update_or_create(id='timestamp-test', app_id='app',
+                                      severity='warning', title='Title2')
+
+    second_note = Notification.get('timestamp-test')
+
+    # Then the last_update_time should be t2
+    assert second_note.last_update_time == t2
+    assert second_note.last_update_time > first_note.last_update_time