Pay rise for millions as National Living Wage set to rise to £12.10 per hour
MILLIONS of workers will get a bumper pay rise when the national living wage rises next April.
The Low Pay Commission (LPC), which advises the government on the minimum wage, has announced plans to raise the statutory rate to £12.10 per hour.
Currently set at £11.44 an hour, the National Living Wage is paid to those over the age of 21.
Minimum pay levels usually rise every year to keep up with rising prices.
In April this year the rate increased 10% from £10.42, and has generally risen but more than inflation in recent years.
But Labour aims to go further after Deputy Prime Minister Angela Rayner vowed to “raise the floor on wages.”
Upon assuming office, Rayner and Business Secretary Jonathan Reynolds instructed the LPC to recommend an increase that reflects the cost of living and ensures the national living wage does not dip below two-thirds of median earnings.
In response, the LPC has now said wages would need to rise by about 5.8% to align with earnings growth, significantly higher than their March estimate of 3.9%.
This means the National Living Wage is likely to rise from £11.44 to £12.10 per hour from April 2025.
The LPC says that two-thirds of median earnings would now serve as a “floor” for their recommendations.
However, they noted that their current estimate might continue to rise due to stronger-than-forecast earnings growth in 2024.
The government usually confirms how much the National Living Wage will rise when it delivers its Autumn Statement.
This will take place on Wednesday, October 30.
A spokesperson for the Department for Business and Trade (DBT) said: “We are changing the rules to put more money in working people’s pockets.
“But we have also been clear we need to consider the businesses who pay these wages, employment prospects and the impact on the wider economy, which is what we instructed the Low Pay Commission to do.
“We believe a hard day’s work deserves a fair day’s pay and that’s exactly what our Make Work Pay plans will do working in conjunction with business.”
At the same time, the government is looking to further shake up the minimum wage rates by introducing a “genuine” living wage by removing age bands for the statutory rate.
It means that those aged 18 and over will eventually be paid the same minimum wage.
However, the DBT hasn’t confirmed when this change will likely come into effect.
MINIMUM WAGE SHAKE-UP
At the moment, there are two different minimum rates all workers are supposed to get across the UK – the National Minimum Wage and the National Living Wage.
The National Minimum Wage (NMW) is the minimum pay per hour for workers who have left school.
Right now, 18 to 20-year-olds must earn at least £8.60 an hour.
Meanwhile, the National Living Wage is the minimum wage for those over 21, and is slightly higher.
It was previously only available to those over 23, but this was adjusted to 21 and over in November 2023.
It’s currently worth £11.44 an hour.
Young workers aged 18 to 20 are expected to see a substantial increase in their statutory rate after ministers have advocated for equal pay with those over 21.
In July, the LPC was told to narrow the gap between the minimum wage rate for 18 to 20-year-olds and the National Living Wage, which the government said would be the first step towards achieving a single adult rate.
Who gets the National Minimum Wage and am I entitled?
TO qualify for the National Minimum Wage, you have to be of school-leaving age, which is usually above 16.
You are eligible to receive the pay rate if you work full-time, part-time or as a casual labourer.
You are also entitled to the National Minimum Wage if you are an agency worker.
Apprentices also qualify for a National Minimum Wage, as well as trainees and staff still in their probationary period.
The rates also apply to disabled workers.
Those who are self-employed, voluntary workers, company directors, and family members who live in the home of the employer and do household chores do not qualify for the minimum wage.
Au pairs, members of the armed forces, and people on a government employment programme are also not entitled to the payment.
NOT ALL IS CHANGING
The National Minimum Wage for children under 18 will not be raised to the same level as that planned for adults.
This means kids aged 16 and 17 still have a slightly lower hourly minimum wage requirement.
Currently, those under 18 are legally required to get £6.40.
Apprentices are paid the same rate, too.
Anyone who thinks they are not getting paid fairly should raise the issue with their employer in the first instance.
If this is ineffective, the next step is to file a complaint on the government’s website.
You can do this by visiting www.gov.uk/government/publications/pay-and-work-rights-complaints.
Employers who do not pay the minimum wage can be publicly “named and shamed”.
Those who blatantly fail to comply are also at risk of facing criminal prosecution.
What's the Real Living Wage?
Unlike the National Minimum Wage and National Living Wage, the rate is not a legal requirement and is voluntary.
Over 15,000 UK businesses voluntarily pay it because they believe their staff deserve a wage that meets everyday needs.
Those working for employers subscribed to the scheme can expect to earn £12 an hour or £13.15 an hour is they’re based in London.