Almost three million workers will see their wages rise as the Government announces increases in both the National Living Wage and the National Minimum Wage.
Ahead of the Autumn Statement, Chancellor Jeremy Hunt has set out details of how the wage rates for the lowest workers will change from next April. The National Living Wage will be increased to £11.44 per hour - up from the current £10.42. Eligibility for the rate will be extended by reducing the age threshold from all those over-23 to all those over-21 for the first time.
The Government said it is the biggest cash increase in the legal minimum that businesses have to pay workers in more than a decade. A 21-year-old will get a 12.4% increase, from £10.18 this year to £11.44 next year, worth almost £2,300 a year for a full-time worker.
The National Minimum Wage for younger workers will also increase. Those between the ages of 18 and 20-years-old will see their minimum pay increase to £8.60 per hour – a £1.11 hike.
Both rates are the same across all parts of the UK. A large proportion of minimum wage jobs are in the retail, care and hospitality sectors, although they are also found in many other parts of the economy too.
The minimum pay rates are decided each year by the Government and are based on the advice of an independent advisory group, the Low Pay Commission. Mr Hunt announced at the Conservative Party conference last month that the National Living Wage would increase to over £11.
The Government estimates that 2.9million workers will benefit from the increased minimum pay rates.
TUC General Secretary Paul Nowak said: “This is badly needed and follows pressure from unions and low-pay campaigners. But with bills sky-high the minimum wage should be raised to £15 an hour as soon as possible."
When will the Living Wage go up?
New wage rates will come into force from April 2024. The National Living Wage will increase from £10.42 to £11.44.
Chancellor of the Exchequer Jeremy Hunt said: “Next April all full-time workers on the National Living Wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.
“The National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.”
Minimum wage rates from April 2024
The hourly rate you are entitled to depends on your age.
23 and over: Will increase from £10.42 to £11.44 (National Living Wage).
21 to 22: Will increase from £10.18 to £11.44.
18 to 20: Will increase from £7.49 to £8.60 (National Minimum Wage)
Under-18s: Will increase from £5.28 to £6.40.
Apprentices: Will increase from £5.28 to £6.40 (The apprentice rate applies to people aged under 19, or people over 19 in the first year of their apprenticeship).
What is the difference between the National Living Wage and Minimum Wage?
A law to introduce a legal minimum was passed by Tony Blair's Labour Government in 1998 after being a key pledge in the party's election manifesto the year before.
The National Minimum Wage came inito effect on 1 April 1999. It started at £3.60 for those aged 22 and older, and £3 for 18-21 year olds.
In 2016, the Tories rebranded the minimum rate paid to over-25s as the "National Living" wage. Five years later in 2021 the age bracket was tweaked so that the rate applied to all those over the age of 23. From next April the age threshold will be lowered again to 21 and over.
The National Minimum Wage is the rate for businesses employing people who are younger than this. The rates are the same across all parts of the UK.
The Living Wage Foundation, which is a campaign group, believes the current rates are not high enough. It is calling for a £12 Living Wage and a higher rate of £13.15 for those living in London.