By law, your employer must pay a minimum amount on average for the hours you work. This is called the:
- National Living Wage (NLW) if you're aged 23 or over
- National Minimum Wage (NMW) if you're aged under 23 or an apprentice
April traditionally brings changes to these rates. Did you know that this year, in addition to an increase in National Insurance Contributions (NICs), the Government has also announced an increase to the National Minimum Wage (NMW) from 1 April 2022?
We set out below the changes for the financial year 2022/2023!
What are the new hourly rates?
Having first been set in 1998 under the Labour government, the National Minimum Wage has acted as a safety net for low-paid workers to access a fair hourly pay rate.
All UK workers aged between 16-22 are entitled to the rate, though the exact figure varies between each age group.
The lowest minimum rate is set at just £4.81 per hour for Apprentices, with the highest rate set at £9.50 for those aged 23 and over.
How have wages been affected by inflation?
Office for National Statistics (ONS) data shows wage growth in the UK is already far behind rising prices.
We also know that between October and December 2021, average weekly pay across Britain fell by -1.2%. When adjusted for inflation, regular pay fell on the year at -0.8%.
Inflation is expected to increase above 7% this year with the Bank of England warning that this is going to hit workers.
"These figures confirm working people still face a fragile recovery in the face of a growing cost of living crisis and spiralling inflation," said Pat McFadden MP, Labour’s shadow chief secretary to the Treasury, in response to the data.
Will the National Minimum Wage increase to £10?
Chancellor Rishi Sunak raised the National Minimum Wage in the Autumn 2021 Budget.
But prices are rising now, mainly for essential bills like food and energy, and the latest official figures show that the rate of inflation is currently more than 5%.
That means the rise in the National Minimum Wage for some rates may not keep up with how much prices are rising, meaning that Brits may still have less in their pockets despite higher wages.
Chancellor Rishi Sunak has been expected to say that the minimum wage will increase to £10 by the next General Election in the Budget.
But no promise to increase the minimum wage to £10 has yet been made by the government. The next general election is due to take place on May 2, 2024.
Download the new National Living Wage & National Minimum Wage Rates table now, so you can check it when needed: