National Living Wage rise comes into effect
As announced by Chancellor Rishi Sunak back in October following recommendations by the Low Pay Commission (LPC), the NLW will increase by 6.6% to £9.50, with a real terms pay increase for 21-22 year olds who will see their pay go up by 9.8% to £9.18 per hour.
Rates of pay across other bands will also rise, with the hourly apprentice rate increasing 11.9% to £4.81.
The Government says the increase will benefit millions of workers across the UK, and marks a significant step forward towards reaching its target for the NLW to reach two-thirds of median earnings by 2024.
However, the LPC notes that recent rises in inflation mean the 6.6% increase in the NLW still represents a real terms cut for workers.
Bryan Sanderson, chair of the Low Pay Commission, said: "Minimum wage workers across the United Kingdom continue to play a vital role in ensuring a strong post-pandemic economic recovery. In previous years the LPC has sought to keep increases to the minimum wage above inflation. However, inflation is now expected to be higher than the forecasts we had when we made our recommendations last October.
"Therefore, while today’s NLW increase of 6.6% gets us back on track to reach the 2024 target of two-thirds of median earnings, it will unfortunately likely be a real terms cut. Though, 21-22 year olds will receive a real terms increase with a rise of 9.8%. We will soon make this group eligible for the NLW and judged it sensible to close the gap between the rates over a longer period, rather than a very large increase once they become eligible.
"The Low Pay Commission met with around a hundred representative bodies last year before making its recommendations. We are frequently their main sometimes even their only advocates. With government support we will continue to try to ensure that they do not suffer from the neglect which was so often characteristic of the past."
Previous rate |
| ||||
|---|---|---|---|---|---|
National Living Wage | £8.91 | £9.50 | +6.6% | ||
21-22 Year Old Rate | £8.36 | £9.18 | +9.8% | ||
18-20 Year Old Rate | £6.56 | £6.83 | +4.1% | ||
16-17 Year Old Rate | £4.62 | £4.81 | +4.1% | ||
Apprentice Rate | £4.30 | £4.81 | +11.9% | ||
Accommodation Offset | £8.36 | £8.70 | +4.1% |
The LPC are seeking evidence on the effects of the National Living Wage and National Minimum Wage, to inform our recommendations on the 2023 rates. This consultation will run from 28 March to 20 June 2022. For more information on the consultation including how to respond please see here.
The LPC will make its recommendations to Government on the 2023 National Minimum Wage rates in October.
