National Living Wage rises

During the 2023 Autumn Statement, Chancellor Jeremy Hunt announced that the National Living Wage would increase from April 2024. This increase will affect nearly 3 million workers, who will receive a pay rise of just short of 10%. In addition to this increase, the chancellor also announced that the National Living Wage would be extended to include those aged 21 and 22 for the first time.   

The National Minimum Wage for those under the age of 21 will also increase. Let’s take a look at what the new rates will be and what this means for workers and their employers.

What will the new rates be?

From April 2024, the National Living Wage and National Minimum Wages will be as follows:

These follow the recommendations given by the Low Pay Commission (LPC), with its Chair, Bryan Sanderson, commenting: 

“The National Living Wage has delivered an improved standard of living to thousands of people who care for our children and elderly, work in farms and shops and at many other essential jobs. These efforts over the lifetime of the NLW mean over £9,000 p.a. more to a full time worker without any increase in unemployment.

“This hasn’t been easy for employers, with the economy facing a range of unprecedented challenges in recent years. The high degree of political and economic uncertainty has made assessing and forecasting the performance of the economy, and therefore our task, very difficult. It is a tribute to my fellow Commissioners that we have continued to achieve consensus.

“Our new recommendation of a National Living Wage of £11.44 attempts to steer a path through this uncertainty and achieve the government target of two-thirds of the median wage, an outcome which if accepted would position the U.K. at the forefront of comparable economies.”

A welcome change for many

This significant increase is likely to be a welcome change for many, especially during the turbulent cost-of-living crisis we’re currently facing, with the government stating that this will “restore the real value” of the National Living Wage. It also brings wages closer to the Living Wage Foundation’s Living Wage of £12 per hour (£13.15 for those in London). 

Yet there are concerns that these new rates could have implications for employers in terms of how sustainable this may be in the current economic climate, especially for those in low-paying industries such as the hospitality and retail sectors. In response to this, some industry experts are suggesting that improving productivity may help employers better adapt to these wage increases. 

What are your thoughts on the National Living Wage increases? If you’re an employer, are you concerned about how your business will manage these additional payroll costs? What will you be doing to help your business adapt? Let us know in the comments section below!