22 November 2023 , 11:17
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Millions of workers are in line for a pay boost after the Government announced increases in both the National Living Wage and the National Minimum Wage.
Ahead of the Autumn Statement, Chancellor Jeremy Hunt set out details of how the wage rates for the lowest workers will change from next April. The minimum pay rates are decided each year by the Government and are based on the advice of an independent advisory group, the Low Pay Commission. Almost three million workers will benefit from higher rates.
The Tory Chancellor will unveil the Government full plans which will impact your pay, benefits, and pensions, just after 12.30pm today. You can see how the new Minimum Wage and Living Rage pay rates affect you below.
What is the difference between Minimum Wage and Living 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 into 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.
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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.
How is Minimum Wage and Living Wage changing?
The current rates are:
- 23 and over - £10.42
- 21 to 22 - £10.18
- 18 to 20 - £7.49
- Under 18 - £5.28
- Apprentice - £5.28
The new rates from April 2024 will be:
- 21 and over - £11.44
- 18 to 20 - £8.60
- Under 18 - £6.40
- Apprentice - £6.40
According to Aegon, someone working full-time who is aged 23 or older will see their yearly salary, before tax and other deductions, boosted by around £1,856 a year. Someone aged 21 to 22 will see an increase of £2,293, while a worker aged 18 to 20 will be boosted by £2,020. Someone who is aged under 18 will get an extra £2,038 a year, while apprentices will see their annual wage go up by £2,038.
Yearly difference, not including tax and other deductions:
- 23 and over - £1,856
- 21 to 22 - £2,293
- 18 to 20 - £2,020
- Under 18 - £2,038
- Apprentice - £2,038