The government has recently confirmed that the national minimum wage and living wage are to increase from April 2024 which could benefit over 2.7 million people.
This marks a historic milestone for minimum wage rates as it represents the most substantial increase ever recorded in monetary terms with it being the first time the minimum wage has risen by more than £1.
For a worker on the national living wage (NLW) who works 37.5 hours per week the recent announcements will result in an annual salary boost of £1,994.36 and a monthly increase of £166.20.
The national living wage (NLW) currently has a legally required minimum age for individuals who are 23 years old and above. This changes from April 2024 with the age requirement for the NLW lowered to 21 years old and above.
What are the new national minimum wage rates?
The amount of money you can earn per hour depends on your age. From April 2024 the national minimum and living wage rates will be:
- For those who are 23 and over the hourly rate will rise from £10.42 to £11.44 known as the national living wage.
- If you fall between the ages of 21 and 22 your hourly rate will increase from £10.18 to £11.44.
- If you’re aged between 18 and 20 your hourly rate will go up from £7.49 to £8.60 which is the national minimum wage.
- For individuals under the age of 18 the hourly rate will increase from £5.28 to £6.40.
- Apprentices will also see an increase in their hourly rate from £5.28 to £6.40. It’s important to note that the apprentice rate applies to individuals who are under 19 years old or those who are over 19 but in their first year of apprenticeship.
The national minimum and living wage rates are applicable throughout the UK and don’t vary on a country or regional basis.
The difference between the national minimum and living wage rates
The national minimum wage represents the lowest hourly pay that nearly all employees paid under PAYE have the right to receive.
The national living wage exceeds the national minimum wage and is applicable to workers who currently are 23 years old or older.
Both the NMW and NLW are legal requirements that need to be adhered to by all employers large and small.
The national living wage also differs from the UK living wage and the London living wage which are calculated by the Living Wage Foundation which is an independant charity that targets in work and post work poverty.
Some of the main differences include:
- Firstly the UK living wage and the London living wage are voluntary pay standards that employers can choose to adopt rather than being legally binding requirements.
- Secondly the hourly rate of the UK living wage and London living wage is determined based on an assessment of need, while the national living wage is based on a target relationship between its level and average pay.
- Thirdly the UK living wage and London living wage apply to workers aged 18 and above whereas the national living wage currently applies to workers aged 23 and above.
The national minimum wage and the Low Pay Commision
As reported in our blog in October 2023 about the low pay commissions (LPC) recommendations on minimum wage rates the government have acted accepted the recommendations and acted accordingly.
Bryan Sanderson, Low Pay Commissions Chair, said:
“The National Living Wage has delivered an improved standard of living to thousands of people who care for our children and elderly, work in farms and shops and at many other essential jobs. These efforts over the lifetime of the NLW mean over £9,000 p.a. more to a full time worker without any increase in unemployment.”
The magnitude of NMW and NLW hikes can in the main be attributed to the robust growth in wages throughout the entire economy which is a trend that may well persist well into the coming year.
Bryan Sanderson, Low Pay Commissions Chair, said:
“This hasn’t been easy for employers, with the economy facing a range of unprecedented challenges in recent years. The high degree of political and economic uncertainty has made assessing and forecasting the performance of the economy, and therefore our task, very difficult. It is a tribute to my fellow Commissioners that we have continued to achieve consensus.”
National minimum wage calculator
To ensure that you are receiving the correct payment for the national minimum or living wage you can utilise the national minimum and living wage calculator.
The NMW and NLW calculator for workers is provided at no cost by the government and enables you to verify your payment amounts and guarantees that you are not being compensated below the prescribed minimum wage rates.
If you have a problem with receiving what you are legally entitled to you can find out what to do on the checkyourpay government website which gives support and guidance for free.
