Millions to get pay rise as new minimal wage introduced – what it means for you

Almost three million employees will see their wages rise because the Government publicizes will increase in each the National Living Wage and the National Minimum Wage.

Ahead of the Autumn Statement tomorrow, Chancellor Jeremy Hunt has set out particulars of how the wage charges for the bottom employees will change from subsequent April. The National Living Wage will likely be elevated to £11.44 per hour – up from the present £10.42. Eligibility for the speed will likely be prolonged by lowering the age threshold from all these over-23 to all these over-21 for the primary time.

The Government stated it’s the greatest money improve within the authorized minimal that companies should pay employees in additional than a decade. A 21-year-old will get a 12.4% improve, from £10.18 this 12 months to £11.44 subsequent 12 months, price nearly £2,300 a 12 months for a full-time employee.

The National Minimum Wage for youthful employees may also improve. Those between the ages of 18 and 20-years-old will see their minimal pay improve to £8.60 per hour – a £1.11 hike.

Both charges are the identical throughout all components of the UK. A big proportion of minimal wage jobs are within the retail, care and hospitality sectors, though they’re additionally discovered in lots of different components of the economic system too.

The minimal pay charges are determined every year by the Government and are based mostly on the recommendation of an unbiased advisory group, the Low Pay Commission. Mr Hunt introduced on the Conservative Party convention final month that the National Living Wage would improve to over £11.

The Government estimates that 2.9million employees will profit from the elevated minimal pay charges.

TUC General Secretary Paul Nowak stated: “This is badly wanted and follows strain from unions and low-pay campaigners. But with payments sky-high the minimal wage ought to be raised to £15 an hour as quickly as potential.”

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.