The national living wage is to increase from April 2024.
Jeremy Hunt, Chancellor of the Exchequer, has announced it will rise by 9.8% to £11.44 per hour and will apply to those aged 21 and over for the first time. A full-time worker aged 23 will receive an increase worth £1,800 a year and a 21-year-old will see a 12%, or £2,300, annual rise.
The national minimum wage for those aged 18 to 20 will also increase to £8.60 per hour from £7.49, while apprentices and those aged 16 and 17 will see an hourly pay increase of more than 20%, rising from £5.28 to £6.40 an hour.
Kate Palmer, HR advice and consultancy director at Peninsula, said: “It is important for employers to be aware of the increase to the national living wage so they can take the necessary steps to prepare in advance of April next year. Employers need to ensure that they always pay at least the statutory minimums in the applicable pay reference period. A failure to do so means that they not only will have to pay the arrears to the employee but could also have to pay a financial penalty and appear on a list of non-compliant employers which could cause the business reputational damage.”
Kate Smith, head of pensions at Aegon, added: “Raising the national living wage 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. This is significantly higher than the most recent increases in national average earnings of 7.9% and September [Consumer Prices Index] CPI of 6.7% used to increase most benefits. 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.”