National Living & Minimum Wage – 2023

1st April 2023 – National Minimum Wage increases to £10.42 (9.7% increase).

 There’ll also be increases to the rate for 16-22 year olds as well as those on apprenticeships. 

You’ll find more information in our employers’ guide to minimum wage where we cover how to make sure your business is compliant.

What’s the real living wage?

The national minimum wage shouldn’t be confused with the voluntary London Living Wage and UK Living Wage, which is calculated based on real living costs and isn’t connected to the government.

Set up by the Living Wage Foundation, the Living Wage is a campaign that encourages employers to pay a wage that reflects everyday costs in London and the UK. According to their data, the ‘real living wage’ in 2022 is £9.90 for the UK (up from £9.50 in 2021) and slightly higher in London at £11.05 (up from £10.85 in 2021).

National living wage vs minimum wage – what’s the difference?

In April 2016, the government introduced a new minimum rate of pay for workers who are at least 25 years old – this is called the national living wage. And since April 2021 more younger people have been eligible for the wage as the threshold now includes anyone aged 23 and over.

While the rate isn’t necessarily based on the cost of living, the government set a target to increase the living wage to two-thirds of median earnings of all employees across the country by 2024. This was achieved in 2021 following recommendations from the Low Pay Commission.

So to summarise, the difference between the national minimum wage and living wage is related to someone’s age:

  • the living wage applies to workers aged 23+*
  • the minimum wage applies to workers aged 16 to 22
  • apprentices aged 16 and 17 get a different rate of pay

*The living wage is expected to include 21 and 22 year olds by 2024.

What is the current national minimum wage?

National minimum wage – under 25 threshold is now under 23

As mentioned earlier, the minimum wage now applies to workers under the age of 23. These are the rates from April 2022:

  • 21 and 22 year olds – £9.18
  • 18, 19, 20 year olds – £6.83

And from April 2023, the rates will be: 

  • 21 and 22 year olds – £10.18
  • 18, 19, 20 year olds – £7.49

What are the rates from April 2023? 

The national minimum wage and living wage rates from April 2023 are shown below.

Current hourly rate (from April 2023)% increase from 2022
National living wage£10.429.7%
21-22 year old rate£10.1810.9%
18-20 year old rate£7.499.7%
16-17 year old rate£5.289.7%
Apprentice rate£5.289.7%
Accommodation offset£9.104.6%

To check if you’re paying the correct minimum or living wage to your employees, you can use the government’s national minimum wage calculator.

For more information : https://www.simplybusiness.co.uk/knowledge/articles/2022/09/what-is-the-national-minimum-wage/

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