Increase in National Living Wage

The Chancellor of the Exchequer, Jeremy Hunt, confirmed that the government has committed to the proposals of the Low Pay Commission for increasing minimum wage rates from 1 April 2024. The actual wage rate recommendations of the Low Pay Commission are expected to be announced next month.

The latest forecasts show that this would create a pay boost next year worth over £1,000 for two million low-paid workers. A full-time worker on the National Living Wage (NLW) will be over £9,000 better off than they would have been in 2010.

These increases are expected to see the NLW increase to over £11 an hour. The NLW is the minimum hourly rate that must be paid to those aged 23 or over. The threshold is expected to further reduce to age 21 by 2024. These changes are based on the remit from the Low Pay Commission which sets a target for the NLW to reach two-thirds of median earnings by 2024 for workers aged 21 and over.

The current minimum wage rates for the period from 1 April 2023 – 31 March 2024 are as follows:

National Living Wage

  • Aged 23 & over – £10.42

National Minimum Wage

  • Aged 21 to 22 – £10.18
  • Aged 18 to 20 – £7.49
  • Aged 16 and 17 – £5.28
  • Apprentice rate – £5.28


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An independent review into the evidence on minimum wage rates has been published by the government. The review concludes that increases in the National Living Wage (NLW) have little effect on employment whilst significantly increasing the earnings of low paid workers. This was found to be the case even in countries who had the most ambitious policies for increasing minimum wage rates. The report also concluded that there was room for the UK to explore a more ambitious National Living Wage (NLW) remit resulting in increased wages in the range of 60% to two-thirds of median hourly earnings.

The NLW currently stands at £8.21 per hour, or 58.9% of median hourly earnings. In response to the report, the Chancellor has pledged a more ambitious increase in the NLW such that, on current projections, it is set to reach £10.50 per hour by 2024. This announcement had the caveat that the increase would be subject to favourable economic conditions.

The Chancellor has also committed to expand the living wage to more young people by bringing down the age threshold for the NLW to cover all workers over the age of 21. The government is expected to issue a fuller response to the review in due course. This is also part of the government’s commitment to do more to end low pay.

Whilst many low paid employees will be buoyed by this news, it is important that employers with a significant proportion of staff who are paid the minimum wage rates pay, consider their medium term planning options.



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