Pay Rise for Millions
Millions of workers across the UK are set to receive a significant pay rise of £1,400 annually, starting next week. Beginning on Tuesday, April 1, the government will implement a substantial increase in the minimum wage for employees aged 21 and over, raising it by 6.7%. This adjustment is part of the government’s commitment to enhancing the National Living Wage, which is reviewed and increased annually, typically in the spring, to keep pace with inflation and the rising cost of living.
The annual adjustment aims to ensure that wages remain aligned with economic changes, providing essential support to workers in various industries, including retail and hospitality. Chancellor Rachel Reeves announced this upcoming increase in her recent Spring Statement, emphasizing its positive implications for millions of employees.
Notably, the previous increase in April 2024 saw the National Living Wage rise by an impressive 10%.
Minimum Wage Shake-Up
Currently, the UK has two distinct minimum wage rates: the National Minimum Wage (NMW) and the National Living Wage. The National Minimum Wage represents the minimum hourly pay for workers who have completed their schooling. Presently, for those under 18 who have left school, the minimum wage stands at £6.40 per hour.
On the other hand, the National Living Wage is designated for individuals aged 21 and older, and is set at a slightly higher rate. This wage was previously applicable only to those over 23 but was adjusted to include workers aged 21 and older as of November 2023. The current rate for the National Living Wage is £11.44 per hour, but this will be revised on April 1, 2025. Both wage rates are adjusted annually to ensure that workers’ earnings keep pace with the cost of living.
A Breakdown of Minimum Wage Changes
The changes taking effect on Tuesday, April 1, will include:
- The National Living Wage for those aged 21 and over will increase from £11.44 per hour to £12.21 per hour.
- The National Minimum Wage for workers aged 18 to 20 will rise from £8.60 to £10.00 per hour.
- The apprenticeship rate for those aged 16 to 17 will increase from £6.40 to £7.55 per hour.
Who Qualifies for the National Minimum Wage?
To qualify for the National Minimum Wage, you must be of school leaving age, which is generally above 16 years old. You are entitled to receive this pay rate whether you work full-time or part-time. Apprentices, trainees, and employees still within their probationary period are also eligible. Importantly, these rates apply to disabled workers as well.
However, certain groups do not qualify for the minimum wage, including self-employed individuals, voluntary workers, company directors, and family members who reside with the employer and perform household chores. Additionally, au pairs, members of the armed forces, and individuals participating in government employment programs are also excluded from receiving this payment.
What’s the Real Living Wage?
In contrast to the National Minimum Wage and National Living Wage, the Real Living Wage is not a legal requirement but a voluntary standard. Over 15,000 businesses in the UK choose to pay this wage, believing that their employees deserve compensation that meets everyday needs. Workers for employers who subscribe to this scheme can expect to earn £12 per hour, or £13.15 per hour if they are based in London.