The National Living Wage and National Minimum Wage rise comes into effect from 1 April
Announced in the Autumn Budget last year by the Chancellor, from 1 April the National Living wage rate rises 6.6% from £8.36 to £9.50.
According to the Department for Business, Energy, and Industrial Strategy (BEIS), the increase in the hourly rate will apply to about 2.5m people which will put £1,000 a year more into full-time workers’ pay packets.
The National Living Wage is the government’s set minimum rate that employers must pay staff aged 23 and over for each hour worked. If you’re over 23, you are legally entitled to the National Living wage, however if you’re under 23, you are only entitled to the National Minimum Wage, which varies based on your age.
The complete list of minimum wage increases from 1 April is as follows:
National Living Wage: £9.50 up from £8.91 (6.6% increase)
21-22 year-old rate: £9.18 up from £8.36 (9.8% increase)
18-20 year-old rate: £6.83 up from £6.56 (4.1% increase)
16-17 year-old rate: £4.81 up from £4.62 (4.1% increase)
Apprentice rate: £4.81 up from £4.30 (11.9% increase)
Accommodation offset: £8.70 up from £8.36 (4.1% increase)
Business secretary Kwasi Kwarteng said: ‘We have never been more determined to make work pay, and by providing the biggest cash increase ever to the National Living Wage, we are giving a boost to millions of UK workers.
‘While no government can control the global factors pushing up the cost of everyday essentials, we will absolutely act wherever we can to mitigate rising costs.
‘With more employees on the payroll than ever before, this government will continue to stand up for workers.’
Even with the increase in wages, many have expressed concern and criticised the Chancellor stating that the rise in wages will not be enough to support families facing the current cost of living crisis.
Energy bills are set to rise dramatically as the price cap increases from £1,277 to £1,971 as of 1 April and the cost of groceries, National Insurance contributions, and VAT on eating and drinking are all set to rise at the same time.
As well as the National Living Wage, there is also an unofficial and voluntary ‘real living wage’. This is calculated by the Living Wage Foundation, a campaigning organisation, and is based directly on cost of living.
According to the Foundation, the ‘real’ living wage is currently £9.90 an hour for workers across the UK and £11.05 in London, almost a pound above the mandatory National Living Wage.
The Treasury has announced that the National Living Wage will increase next April to £9.50 per hour. This represents a 6.6% increase. These new rates will be effective from 1 April 2022.
From April 2022, minimum pay rates will increase as below.
- NLW (workers aged 23+) — from £8.91 to £9.50 per hour.
- NMW rates:
- workers aged 21–22 — from £8.36 to £9.18 per hour
- workers aged 18–20 — from £6.56 to £6.83 per hour
- workers aged 16–17 — from £4.62 to £4.81 per hour
- apprentice rate — from £4.30 to £4.81 per hour.
The Chancellor, Rishi Sunak, announced on 25 November 2020 that the National Living Wage (NLW) will increase by 2.2% to £8.91 per hour from 1 April 2021. Going further, the Government has also decreased the age threshold from ages 25 and over to 23 and over.
National wage rates will increase, as follows:
|Age||Current rates||Rates from 1 April 2021|
|Workers aged 25 and over (NLW)||£8.72 an hour||–|
|Workers aged 23 and over (NLW)||–||£8.91 an hour|
|Workers aged 21‒24||£8.20 an hour||–|
|Workers aged 21‒22||–||£8.36 an hour|
|Development rate for workers aged 18‒20||£6.45 an hour||£6.56 an hour|
|Young workers rate for workers aged 16‒17||£4.55 an hour||£4.62 an hour|
|Apprentices under 19, or 19+ but in the first year of the apprenticeship||£4.15 an hour||£4.30 an hour|
By law, it is important that employers pay staff the correct national wage rates for their age groups or risk facing serious repercussions for failing to do so. The risks range from unlawful deductions from wages claims, fines from the Government, and/or being “named and shamed” as a “rogue” employer.