Millions of workers will be getting a boost when the minimum wage increases this week. The National Minimum Wage and the National Living Wage are both being increased from April 1, as millions continue to grapple with rising costs of living.
The increase, which was announced by Chancellor Jeremy Hunt last November, will affect around 2.5 million people and is an increase of around 10% compared to last year. However, any benefits to households are likely to be impacted by inflation unexpectedly rising to 10.4% in February, up from 10.1%.
Customers are also expected to be hit by further increases to energy prices from April, despite the government's energy price guarantee remaining the same, as well as increases to council tax and other costs. You can read more about why most people will pay more for their energy bills next month here.
Read more: DWP announces date millions will start receiving £301 cost of living payment
Here's what you need to know about how much both the minimum wage and living wage are going up, and how it affects you. To get all the latest money-saving news straight to your inbox sign up here.
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What is the National Living Wage?
The so-called National Living Wage is the government’s set minimum rate that employers must pay staff aged 23 and over for each hour worked. Essentially, if you’re over 23, you are legally entitled to the National Living wage. If you’re under 23, you are only entitled to the National Minimum Wage, which varies based on your age.
The Living Wage is calculated by the organisation Living Wage Foundation, which sets its sum based directly on the actual cost of living – things like paying for transport, rent, energy bills, etc. It is voluntary, meaning employers can choose to sign up to the Real Living Wage pledge if they want to, but they don't have to.
What is the National Minimum Wage?
This is the minimum pay per hour most workers are entitled to. People classed as ‘workers’ must be of at least school-leaving age to claim this wage.
How much are these going up by?
The complete list of minimum wage increases from April 1 is as follows:
- National Living Wage: £10.42 up from £9.50 (9.7% rise)
- 21-22-year-old rate: £10.18 up from £9.18 (10.9% rise)
- 18-20-year-old rate: £7.49 up from £6.83 (9.7% rise)
- 16-17-year-old rate: £5.28 up from £4.81 (9.8% rise)
- Apprentice Rate: £5.28 up from £4.81 (9.8% rise)
- Accommodation Offset: £9.10 up from £8.70 (4.6% rise)
Who do the increases not apply to?
The wage increases don't apply to all workers. Self-employed people, volunteers, prisoners, or people on pre-apprenticeships schemes don’t qualify for the National Minimum Wage.
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