New national minimum wage rates set to increase by over a pound an hour for all age groups
Chancellor Jeremy Hunt has announced significant increases to the National Living Wage and National Minimum Wage in line with the recommendations of the independent Low Pay Commission.
The highest rate of hourly pay, available to those who qualify for the NLW, will increase to £11.44 per hour (a 9.8% rise). The government estimates that this will increase the annual income of people who work full-time by around £1,800.
More significantly, the age restriction is being lowered and will apply everyone aged 21 and over, apart from apprentices in their first year. Currently you have to be 23 years old or over to qualify.
National minimum wage for workers under the age of 21 as well as apprentice rates will also increase. Those at the lower end of the pay rates will receive hourly pay rises in excess of 20%.
The changes taking effect from 1 April 2024 are:
| NMW rate from 1 April 2024 | Increase in pence | Percentage increase | |
National Living Wage (21 and over) | £11.44 | £1.02 | 9.8% |
18-20 year old rate | £8.60 | £1.11 | 14.8% |
16-17 year old rate | £6.40 | £1.12 | 21.2% |
Apprentice rate | £6.40 | £1.12 | 21.2% |
Accommodation offset | £ 9.99 | £0.89 | 9.8% |
The Low Pay Commission is charged by the government to reach a NMW target representing two-thirds of median earnings for all workers aged 21 and over by 2024. These rate increases meet that target, and the government has asked the Commission for evidence to help it develop future NMW policy. Its report should be available by the end of this year.
The NLW is now fairly close to the rates recommended by the Real Living Wage Foundation that apply to workers working outside of London. It calculates its rates according to the cost of living, based on a basket of goods and services. In October, it announced an 10% increase in rates to reflect the persistently high cost of living which disproportionally impacts low pay workers. Its rates rise to £12 an hour across the UK (£1.10 increase), and £13.15 an hour in London (£1.20 increase). Unlike the NMW, these rates apply to all age groups.
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