What is the new minimum wage and when does it go up in 2023?
Given that pay growth is still lagging behind the cost of living, the Government took the decision to raise the national living wage (NLW) at the start of April.
This is an obligatory minimum wage payable to workers in the UK aged 23 and over, which came into effect on April 1, 2016.
If you are 23 years old or above and classed as a “worker”, you are entitled to the NLW (also known as the minimum wage).
Although wages have been rising at their fastest rate in more than 20 years, the cost of living is rising quicker.
How much is the national living wage increasing?
The NLW has risen to £10.42 per hour from £9.50, an increase of 92p or 9.7 per cent, for over 23-year-olds.
The 21- to 22-year-old rate has risen to £10.18, for 18-20s it has risen to £7.49, while 16- to 17-year-olds receive £5.28, as do apprentices.
When is the minimum wage going up in 2023?
This change came into effect on April 1, 2023.
The rise of nearly 10 per cent will benefit around 2.5 million people, The Times said.
The move is aimed at closing a financial gap in the nation by raising taxes by £22 billion and cutting spending by £33 billion.
What are the current national living wage and London living wage amounts?
As of April 2023, the NLW is £10.42 per hour for those aged 23 and over, £10.18 for those aged 21–22, £7.49 for ages 18–20, £5.28 for under-18s, and £5.28 for apprentices.
The London living wage is currently set at £11.95.
Why is the Government increasing the national living wage?
Chancellor Jeremy Hunt announced in his Autumn Statement in November that the NLW would increase in 2023.
The increase was encouraged by the Low Pay Commission, the independent body which advises the Government on the payment.
Their recommendations ensure the NLW continues on track to reach the Government’s target of two-thirds of median earnings by 2024.
Regular pay rose by 5.7 per cent last year, the fastest growth since 2000 excluding the pandemic, when some people secured big wage rises when returning to work from furlough. That has plateaued this year.
However, the UK unemployment rate also rose slightly to 3.6 per cent in the three months to September, up from 3.5 per cent in August, the Office for National Statistics (ONS) said. The latest figures show unemployment at 3.7 per cent, and an increase in the numbers of long-term unemployed.