- Minimum wage to increase
- Age-based adjustments announced
- Industry and public reactions
Officially referred to as the National Living Wage, the current hourly minimum wage for laborers aged 23 and above is £10.42.
However, Chancellor Jeremy Hunt has also determined that individuals aged 21 and 22 will be subject to the rate for the first time.
At that rate, a full-time employee at the wage level who is 23 years old would accrue an additional £1,800 annually. The annual increase for a 21-year-old would be an effective £2,300.
Financial Impact for Employees
Mr. Hunt predicted at an October Conservative Party conference that the minimum wage would surpass £11 in April. However, the confirmed increases for workers aged 22 and 21 and over-23 represent a 9.8% and 12.4% increase, respectively, compared to the previous year.
The prevailing hourly minimum wage for individuals aged 21 to 22 is £10.18.
Additionally, the National Minimum Wage for individuals aged 18-20 will rise from £7.49 to £8.60 per hour. Thus, a total of 2.7 million low-paid workers will benefit from the wage increases above inflation.
Additionally, apprentices will receive a wage increase of over 20% per hour, from £5.28 to £6.40.
Industry and Public Reactions
The chancellor wholeheartedly endorsed the Low Pay Commission’s recommendations, which provide guidance to the government regarding the minimum wage. He stated the Conservatives’ goal of “ending low pay” by raising the living wage to two-thirds of average income.
The National Living Wage has halved the number of low-wage workers since 2010, making labour lucrative, Mr. Hunt said.
The chair of the Low Pay Commission, Bryan Sanderson, described the minimum wage increase recommendation of £11.44 as an “attempt to navigate a path” amidst “a significant degree of political and economic uncertainty.”
However, such wage increases have not been appeased by all members of the industry. Similar increases the year prior caused the retail and hospitality industries to express concern regarding rising wage costs.
Kate Nicholls, chief executive officer of the hospitality industry organization UK Hospitality, responded to the announcement on X, formerly Twitter, that the increase was “a reminder that while the government may declare it, it is businesses that are responsible for its implementation, which is why it is critical that additional measures be taken to reduce costs and taxes, especially [business rates].”