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HCR Law Events

6 January 2023

National Minimum Wage and National Living Wage to rise from 1st April 2023

The government has published the policy paper ‘Benefit and Pension Rates 2023 to 2024’ and the ‘Autumn Statement’ which set out the below statutory benefit, National Minimum Wage and National Living Wage rate increases. The rates will come into effect from 1st April 2023.

Payment Increased Figure 2023/2024 Previous Figure 2022/2023
Minimum Wage and National Living Wage age 23+ £10.42 per hour £9.50 per hour
21 to 22-year-old Minimum Wage and National Living Wage rate £10.18 per hour £9.18 per hour
18 to 20-year-old Minimum Wage and National Living Wage rate £7.49 per hour £6.83 per hour
16 to 17-year-old Minimum Wage and National Living Wage rate £5.28 per hour £4.81 per hour
Statutory Maternity Pay (SMP) £172.48 per week £156.66 per week
Statutory Paternity Pay (SPP) £172.48 per week £156.66 per week
Statutory Adoption Pay (SAP) £172.48 per week £156.66 per week
Shared Parental Pay (ShPP) £172.48 per week £156.66 per week
Statutory Parental Bereavement Pay (SPBP) £172.48 per week £156.66 per week
Statutory Sick Pay (SSP) £109.40 per week £99.35 per week
Apprentice Rate £5.28 per hour £4.81 per hour
Accommodation Offset £9.10 per day £8.70 per day

The National Living Wage versus the UK Living Wage

The main differences between the National Living Wage and UK Living Wage include the following:

  • The Low Pay Commission recommends the National Living Wage rate to the government for it to consider and decide whether to implement it. The UK Living Wage is calculated by the Living Wage Foundation which is a non-government organisation.
  • The National Living Wage is legally binding on employers, meaning that they must pay the rate as a minimum to their employees. The UK Living Wage is a voluntary pay benchmark that employers can sign up to if they wish. There are currently over 11,000 UK employers signed up.
  • The National Living Wage is calculated based on a percentage of average earnings within the UK, whereas the hourly rate of the UK Living Wage is based on an attempt to measure employee needs in relation to pay. This is achieved through separate budgets being produced for different household types, considering what members of the public think a person needs for a minimum acceptable standard of living in the UK.
  • The National Living Wage applies to workers aged 23 and over. The UK Living Wage applies to workers aged 18 and over.
  • There is one National Living Wage that applies to the whole of the UK. In contrast, there is a separate London Living Wage set to reflect the higher costs of living in the capital.

Going forward

The National Living Wage will increase by 92 pence – 9.7% – to £10.42 and the government has commented that it is set to reach their 2019 manifesto target of two-thirds of median earnings – £10.50 per hour – by 2024.

In comparison, the Living Wage Foundation has set the current UK Living Wage at a higher rate of £10.90 per hour. They consider this to meet the everyday needs of employees when considered in line with a basket of household goods or costs of services.

With a recession on the horizon, it will be interesting to monitor the actions of the government in comparison to that of the Living Wage Foundation and the extent to which the National Living Wage and UK Living Wage rates continue to differ following a cost-of-living crisis.

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About the Author
Ben Stanton, Partner

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