Wages for more than two million workers set to rise by £1,000 next year

02 October 2023 , 08:15

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Minimum wage in the UK is expected to rise to £11 next year (Image: Getty Images)

Millions of workers are expected to see their wages rise by over £1,000 a year as the National Living Wage is set to be increased next year.

The Chancellor Jeremy Hunt is expected to make the announcement at the Conservative Party Conference in Manchester this afternoon. It is believed that the National Living Wage will be increased to at least £11 per hour - up from the current £10.42.

The National Living Wage is an "obligatory" minimum wage businesses pay workers in the UK aged 23 and over for each hour they work. The National Minimum Wage is the rate businesses employing people between the ages of 22 years and under can pay. The rates are the same across all parts of the UK.

The retail, care and hospitality sectors account for a large number of minimum-wage jobs, although they are found in many other parts of the economy too.

The rates which workers are paid are decided each year by the Government and are based on the advice of an independent advisory group, the Low Pay Commission. The Low Pay Commission recently estimated that the rate should be between £10.90 and £11.43 - with a central estimate of £11.16.

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The 58p an-hour increase would see the annual earnings of a full-time worker on the national living wage increase by around £1,000 a year according to the Government. The move is also expected to impact around two million workers in the UK.

However, you should be aware that if you make more money - if you earn over the Personal Tax Allowance of £12,570 a year - then you will also be taxed more. On earnings between £12,570 and up to £50,270, you pay the basic income tax rate of 20%.

If you earn £12,570 or less, you currently pay no income tax whatsoever. The personal tax allowance rate has been frozen at this level until April 2028.

However, alongside this, the Chancellor is expected to announce that ministers will "look again" at the benefit sanctions regime in a bid to get the unemployed back into work.

The Chancellor, alongside Work and Pensions Secretary Mel Stride, will use the Autumn Statement - due to be released on 22 November - to detail in-depth plans around making it harder for those not taking "active steps" in moving into employment to claim benefits.

Current UK hourly pay rates

• 23 and over - £10.42 (National Living Wage)
• 21 to 22 - £10.18 (National Minimum Wage)
• 18 to 20 - £7.49
• Under 18 - £5.28
• Apprentice - £5.28 - the apprentice rate applies to people aged under 19, or people over 19 in the first year of their apprenticeship.

Full details about the National Living and Minimum Wage on GOV.UK here.

Ruby Flanagan