The Government has announced the biggest ever increase to the National Living Wage, equivalent to a pay rise of more than £1,800 a year for a full-time worker.
The announcement was made on the eve of the Autumn Statement which will be presented by Chancellor Jeremy Hunt today.
The National Living Wage was introduced in 2016 and currently sets the minimum hourly pay a person over the age of 23 earns when working. It is a higher rate than the minimum wage which applies to people under the age of 23.
Since 2010, the National Living Wage will have doubled in cash terms from around £10,500 to nearly £21,000 a year for a full-time worker.
From April, workers on the National Living Wage will receive a pay boost of nearly 10%, from £10.42 to £11.44. The Treasury said the move fulfils the Government’s manifesto pledge to end low pay for those on the National Living Wage.
Eligibility for the National Living Wage will also be extended by reducing the age threshold to 21-year-olds for the first time. A 21-year-old will get a 12.4% increase, from £10.18 this year to £11.44 next year, worth almost £2,300 a year for a full-time worker.
National Minimum wage rates for younger workers will also increase. Workers aged 18 to 20 will get a wage boost to £8.60 per hour – a £1.11 hourly pay bump.
Nearly three million will benefit
The Department for Business and Trade estimate 2.7 million workers will directly benefit from the 2024 National Living Wage increase.
Hunt said: “Next April, all full-time workers on the National Living Wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.
“The National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.”
Kate Smith, head of pensions at Aegon, said: “Raising the National Living Wage to £11.44 an hour, a massive 9.8% increase, will bring much-needed financial relief to low-income earners, significantly boosting their earning power and help to alleviate the burden of rising living costs.
“At almost 10%, this is significantly higher than the most recent increases in national average earnings of 7.9% and September CPI of 6.7% used to increase most benefits. And the added bonus is that this rate will also apply to 21 and 22-year-olds for the first time, giving this group a pay rise of over 12%. However this still falls short of the real Living Wage which is £13.15 an hour in London and £12 an hour for the rest of the UK, which many employers have signed up to.”
