What is the minimum wage?
The minimum wage is the baseline amount of pay that an employer is legally required to provide to an employee for their work. The National Minimum Wage in the UK is set by the government and varies based on age and apprenticeship status.
For UK employees, the minimum wage is divided by two key rates:
The National Living Wage (NLW): For those aged 23 or over
The National Minimum Wage (NMW): For those under 23 (or apprentices)
What is the National Minimum Wage?
TheNational Minimum Wageapplies to anyone between the ages of 16-22 (or who is in their first year of an apprenticeship).We can understand it as the step before the National Living Wage. Most importantly, the National Minimum Wage is set by age.
How many UK workers get paid the minimum wage?
Estimates suggest that the total number of jobs paid, within five pence of the minimum wage, will rise to 2 million workers as of 1 April 2023. This is an increase of around 400,000, suggesting that 1.6 million were paid the minimum wage in 2022.
What is the National Living Wage?
The National Living Wage is a UK wage scheme designed to be higher than the minimum wage. It applies to all workers aged 23 and up (who are not in the first year of an apprenticeship). This applies to the majority of UK workers on minimum pay.
What is the London Living Wage?
The London Living Wage is a project, championed by the Mayor of London, for employers to voluntarily pay a higher standard of the National Living Wage for workers in the capital.
The London Living Wage is currently £13.15 an hour.
When does the minimum wage increase in the UK?
Every year on the first of April, the National Living Wage changes. From 1 April 2024 onward, the new National Living Wage stands at£11.44perhour.
This change signifies the largest increase in the minimum wage in cash terms and the first time it has increased by more than £1.
Why does the UK minimum wage keep increasing?
There's a host of reasons to increase the minimum wage in the UK. The main reason is to assist workers in keeping up with the cost of goods, as per inflation, to help people essentially make ends meet. Increases, in line with inflation, are designed to help fight against poverty and help foster more economic security.
What is minimum wage for 2024 in the UK?
Taking effect on April 1, 2024, the new National Living Wage will rise to £11.44. This is higher than the initial projections made by the Low Pay Commission (LPC) that first suggested it would rise to £11.16.
Wage rate | 2023 rate | 2024 rate | Increase |
|---|---|---|---|
National Living Wage | £10.42 | £11.44 | 9.8% |
18-20 Year Old Rate | £7.49 | £8.60 | 14.8% |
16-17 Year Old Rate | £5.28 | £6.40 | 21.2% |
How is the minimum wage for 2024 calculated?
The minimum wage is primarily based on the UK Government's target for the minimum wage to hit two-thirds of median earnings by 2024.
Due in part to emerging from the pandemic, many feared that a potential economic slowdown would need to be bolstered by increased wage growth. This led to a larger increase on the minimum wage in 2023, to help "push us" out of the pandemic faster.
The size of this current increase is driven by the strength of pay growth across the economy (forecasted to continue into 2024).
What was the UK minimum wage for 2023?
As of 1 April, 2023, the UK minimum wage has increased. The National Living Wage stood at an hourly rate of £10.42. Additionally, the rate for 21-22 year olds was £10.18, for 18-20 year olds £7.49 and for 16-17 year olds it was £5.28.
You can find the changes, alongside their percentage increases, below:
Wage rate | 2022 rate | 2023 rate | Increase |
|---|---|---|---|
National Living Wage | £9.50 | £10.42 | 9.7% |
21-22 Year Old Rate | £9.18 | £10.18 | 10.8% |
18-20 Year Old Rate | £6.83 | £7.49 | 9.6% |
16-17 Year Old Rate | £4.81 | £5.28 | 9.7% |
Who is entitled to the National Minimum Wage?
Both the National Living Wage and National Minimum Wage apply to all workers in the UK. It mainly varies based on age (and apprenticeship status). But, even part-time labourers, casual workers and anyone else providing work in the UK are entitled to receive a minimum wage of some amount.
Who does not qualify for the National Minimum Wage?
The National Minimum Wage in the UK does not apply to those who are self-employed, working on a volunteer basis and family members who share a common residence as their employer and complete household chores.
What is the Apprentice Rate?
The apprentice rate only applies to people under the age of 19, or who are over the age of 19 but are subsequently in the first year of an apprenticeship. The apprentice rate for 2025 will be £6.40. If apprentices are both over the age of 19 and no longer in their first year, they are entitled to their relevant minimum wage.
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What is the Real Living Wage?
Introduced as a voluntary wage scheme in the UK, theReal Living Wageis paid by over 10,000 employers in the UK (including Nationwide, Google, Everton FC and Chelsea FC). It is currently£12.00in the UK and£13.15in London.
Was There A Change in the Real Living Wage?
As of 24 October 2023, the Real Living Wage has seen an increase (year-over-year) and now sits at £12.00in the UK and£13.15in London. This will extend to 460,000+ workers who are currently paid across 14,000+ employers.
2024 UK wage rates compared
As of 1 April, 2024, the wage rates will compare as such...
National Minimum Wage | National Living Wage | Real Living Wage |
|---|---|---|
Statutory | Statutory | Voluntary |
£6.40 - £8.60 | £11.44 | £12.00 |
16-20 years old | 21 and older | 19 and older |
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