Over three million workers will receive a pay increase next month, with some seeing their income rise by more than £1,000 a year. The increase comes as the National Living Wage and National Minimum Wage are set to rise, which will take effect from April 1.
Announced in last year’s Budget, the 6.7% increase to the National Living Wage will raise the rate to £12.21 per hour, benefiting full-time workers with an additional £1,400 annually. The National Minimum Wage will increase to £10 per hour, while the minimum rate for 18-20-year-olds will rise by £1.40 to £10 per hour, boosting eligible full-time younger workers’ pay by £2,500 a year.
An impact assessment estimated that these reforms would put around £ 1.8 billion into workers’ pockets over the next six years.
Commenting on the increases, Chancellor Rachel Reeves said: “This Government promised a genuine living wage for working people that will support people with the cost of living, creating a workforce that is fit and ready to help us deliver the number one mission to growth the economy.
“This pay boost for millions of workers is a significant step towards delivering on that promise.”
Employment Rights Minister Justin Madders added: “Economic growth only matters if working people are feeling the benefits. This will be a welcome pay bump for millions of workers who in turn will spend more in the real economy boosting our high streets.”
The National Living Wage applies to most workers, whereas the National Minimum Wage is the minimum amount an employer must pay per hour for all workers aged below 21.
The minimum hourly wage for an apprentice is also set to rise this year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by 18%, rising from £6.40 to £7.55 an hour.
Low Pay Commission Chair Baroness Stroud said: “The increases we recommended are a big step towards making work pay and achieving a genuine living wage.
“These rates secure a real-terms pay increase for the lowest-paid, and substantial increases for young workers make up some of the ground lost against the adult rate over time. It’s important we continue to assess the effects of these changes on employers and workers; to that end, the Low Pay Commission will be consulting with both groups in the coming months.”
The changes from April will mean:
- The National Living Wage for those aged 21 and over will rise from £11.44 per hour to £12.21 per hour.
- The National Minimum Wage for 18- to 20-year-olds rises from £8.60 to £10.00 per hour.
- The apprenticeship rate, and for 16- to 17-year-olds rises from £6.40 per hour to £7.55 per hour.
