The government has announced forthcoming adjustments to the National Living Wage (NLW) and National Minimum Wage (NMW), set to come into effect from April 2024.
National Living Wage for individuals aged 21 and above: Initially designated for those 25 and older, the NLW was extended to include individuals aged 23 and above in April 2021, following recommendations by the Low Pay Commission in 2019. Effective April 2024, the eligibility age will be further reduced to 21.
Hourly rate increases: Commencing April 1, 2024, the following changes will take place:
The NLW for individuals aged 21 and over will see a £1.02 (or 9.8%) rise, increasing from £10.42 to £11.44 per hour.
The NMW for individuals aged 18-20 will undergo a £1.11 (or 14.8%) increase, climbing from £7.49 to £8.60 per hour.
Individuals aged 16-17 and apprentices will witness a £1.12 (or 21.2%) hike in the NMW, advancing from £5.28 to £6.40 per hour.
The Low Pay Commission attributes the magnitude of these increases to the sturdy growth in pay observed across the economy. Nonetheless, these adjustments fall short of the voluntary 'real' Living Wage established by the Living Wage Foundation, which currently stands at £12 nationwide and £13.15 in London.
Employers failing to adhere to the prescribed wage rates not only expose themselves to potential claims from employees but also face the risk of being publicly disclosed in a government report. It is imperative for employers to stay informed about the escalating pay rates, particularly with regard to the NLW's extension to younger workers aged 21 and above starting next April.
Apprentices (Any age) in year 1: Minimum wage: £6.40
(£6.40 x 37.5 x 52 = £12480 per annum)
Apprentices (Under 18) in year 2: Minimum Wage £6.40
(£6.40 x 37.5 x 52 = £12480 per annum)
Apprentices (18-20) in year 2: Minimum Wage £8.60
(£8.60 x 37.5 x 52 = £16,770 per annum)
Apprentices (21+) in year 2: Minimum Wage £11.44
(£11.44 x 37.5 x 52 = £22308 per annum)
*This information is a guide only. Please seek advice from your accountant.
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