Yesterday, against the backdrop of rising inflation and economic challenges, Chancellor Jeremy Hunt announced a number of new measures designed to help rebuild the economy and reduce debt. Amongst the announcements, the government confirmed the new rates of National Living Wage and National Minimum Wage, which will be enforceable from April 2023.
The government has accepted the recommendation of the Low Pay Commission to increase the NLW for individuals aged 23 and over by 9.7% to £10.42 an hour from 1 April 2023. This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over two million low paid workers. NMW rates for younger workers and apprentices will be increased by similar percentages.
From the 1st April 2023, the rates will be as follows:
- For those aged 23 and over there will be an increase from £9.50 to £10.42 per hour, which is a 92p increase, equal to 9.7%
- For ages 21-22 there will be an increase from £9.18 to £10.18 per hour, which is a £1 increase, equal to 10.9%.
- For ages 18-20 there will be an increase from £6.83 to £7.99 per hour, which is a 66p increase, equal to 9.7%
- For ages 16-17 there will be an increase from £ 4.81 to £5.28 per hour, which is a 47p increase, equal to 9.7%
- The apprentice rate will also be increased from £4.81 to 5.28 per hour, which is a 47p increase, equal to 9.7%.
The increase in wages for those aged 21-22 is intended to close the gap between the National Living Wage and National Minimum Wage, so that this age group is on course to receive the full National Living Wage by 2024.
The Low Pay Commission has recognised that such increases have come at a time when many are feeling the difficulties and pressures of the cost-of-living crisis and the increase aims to go some way in supporting the wages and standard of living of lower paid workers.