The National Living Wage for workers aged 21 and over will increase from £11.44 to £12.21 per hour, with the increase in the minimum hourly rate worth £1,400 per year for an eligible full-time worker.
The move was widely expected, with confirmation of the pay boost being announced before today’s widely anticipated Budget.
The 18-20 National Minimum Wage will rise by £1.40 per hour, from £8.60 per hour to £10. The increase will mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year.
The Government said the increase marks the first step towards aligning the National Minimum Wage and National Living Wage to create a single adult wage rate, which would take place over time.
The Government said the pay increases build “on the commitment to be a pro-business, pro-worker, pro-growth Government” and will deliver “a key plank of the Plan to Make Work Pay”.
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Rachel Reeves, Chancellor of the Exchequer, said: “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”
The minimum hourly wage apprentices will also go up next year, with an 18-year-old apprentice seeing their minimum hourly pay increase from £6.40 to £7.55 per hour, an 18% rise.
The Government said the pay increases will mean three-and-a-half million workers will receive a pay rise this year in total.
‘Young workers will see substantial increases’
Philippa Stroud, chair of the Low Pay Commission, said: “The Government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards. At the same time, employers have had to deal with the adult rate rising over 20% in two years, and the challenges that has created alongside other pressures to their cost base.
“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”
