The National Minimum Wage (NMW) will increase across all age groups from next year, the Chancellor has announced.
If you are an employer, here’s what you need to know.
What’s changing?
To support the lowest-paid workers in the wake of the coronavirus pandemic, the legal minimum wage will be “significantly” increased. The changes – which come into effect from April 2022 – are outlined below:
- National Living Wage (for workers over the age of 23) – up 6.6 per cent from £8.91 to £9.50
- 21-22 Year Old Rate – up 9.8 per cent from £8.36 to £9.18
- 18-20 Year Old Rate – up 4.1 per cent from £6.56 to £6.83
- 16-17 Year Old Rate – up 4.1 per cent from £4.62 to £4.81
- Apprentice Rate – up 11.9 per cent from £4.30 to £4.81
- Accommodation Offset – up 4.1 per cent from £8.36 to £8.70
For a full-time worker over the age of 23, the hike represents a pay rise of more than £1,000 per year.
National Living Wage threshold to be lowered in 2024
To narrow the gap between the lowest-paid workers, the age threshold for the National Living Wage was lowered from 25 to 23 in April this year. But the threshold will be reduced again to 21 by 2024 following recommendations by the Low pay Commission.
It means that anyone aged 21 and over will receive the full National Living Wage from April 2024.
Labour market “recovered strongly”
Commenting on the implementation of the new rates, Bryan Sanderson, Low Pay Commission Chair, said: “The rates we recommended will put money in the pockets of care-workers, food distributors and many other groups of the lowest-paid members of our society up and down the UK. Many of them have made a vital contribution during the last few difficult months.
“The pandemic has been an exceptionally difficult period for businesses and workers alike, but the labour market has recovered strongly and the economy is expected to continue to grow over the next year. This is attributable in no small part to comprehensive Government support.”
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