Biggest ever increase to the National Living Wage, worth over £1,800 a year for a full-time worker…
- Since 2010 the National Living Wage has doubled in cash terms from around £10,500 to nearly £21,000 a year for a full-time worker.
- For the first time, 21-year-olds on the National Living Wage will always earn two-thirds of average earnings.
The Chancellor will deliver a pay rise of more than £1,800 a year for a full-time worker, as he confirms that the National Living Wage will increase by over a pound an hour from April.
The almost 10% pay boost, from £10.42 to £11.44 an hour, is the biggest cash increase in the National Living Wage in more than a decade and to end low pay for those on the National Living Wage.
Eligibility for the National Living Wage will also be extended by reducing the age threshold to 21-year-olds for the first time. A 21-year-old will get a 12.4% increase, from £10.18 this year to £11.44 next year, worth almost £2,300 a year for a full-time worker.
National Minimum wage rates for younger workers will also increase. 18-20-year-olds will also get a wage boost to £8.60 per hour – a £1.11 hourly pay bump.
The Department for Business and Trade estimate 2.7 million workers will benefit from the 2024 National Living Wage increase.
Chancellor of the Exchequer Jeremy Hunt:
Next April all full-time workers on the National Living Wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.
The National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.
The minimum hourly wage for an apprentice is also boosted next year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by over 20%, going from £5.28 to £6.40 an hour.
The National Living Wage was introduced in 2016 and currently sets the minimum hourly pay a person over the age of 23 earns when working. The new rate will now apply to 21- and 22-year-olds, and means that the government has met its ambitious target of lifting the National Living Wage to two-thirds of median earnings by 2024, ending low hourly pay for those on the National Living Wage.
Since 2010, the proportion of workers on low hourly pay has more than halved from 21.3% to 8.9%, supported by increases to the National Living Wage. Personal tax thresholds have been doubled, meaning a working person can now earn £1,000 a month tax-free for the first time.
Getting more people into work and ensuring work pays is a priority for the government. The Chancellor will set out further measures in tomorrow’s Autumn Statement.
The National Minimum Wage rate for those aged 22+ was £5.80 from 1 October 2009 to 31st September 2010 . A worker working full-time would have received around £10,500 a year gross, whereas it will be almost £21,500 for a NLW worker from April 2024.
Don’t forget SMP
The increase to National Living Wage and National Minimum Wage is a pay rise that requires a recalculation of earnings used for Statutory Maternity Pay (SMP). For those who in effect have a resulting pay rise for pay reference periods starting on or after 1st April 2024 who are on maternity leave or the period back to the average weekly earnings calculation require a recalculation and rise.
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