Changes to the minimum wage set by the government has increased by more than £1 for the first time, which sees low-paid workers receive a boost to their salary.
The changes will see the main wage rate rise from £10.42 to £11.44 an hour and will apply to all workers over the age of 21, rather than 23 as before.
The government has said around 2.7 million workers will directly benefit from the increase and will be worth up to £1,800 for a fulltime worker on minimum wage.
The changes were announced by Chancellor Jeremy Hunt in the Autumn Statement last year, as he called the changes ‘the largest ever cash increase in the national living wage.’
Rates for apprentices have also risen, from £5.28 to £6.40 per hour.
The changes have come into force after the government was advised by the Low Pay Commission (LPC) to increase the minimum wage for low paid workers.
Bryan Sanderson, LPC Chair, said:
“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.”
Low-paid workers have welcomed the increase, as the rising cost of living continues.
Samuel, who works at Grindsmith Coffee House in Salford, is one of those who will benefit from the boost. The 26-year-old told the BBC that before the pay increase, he was left with around £400 at the end of the month after rent and bills were paid, but felt he was being left “shorter and shorter” each time.
“Maybe for a month you’ll be like ‘Oh, I’ve got money this month’ but next month will be a bit of a rough one,” Samuel says.
He says the increase in the minimum wage will make up for the way prices have been rising due to inflation and help him afford more than just the essentials.
However, small businesses have said the increase has caused complications as the minimum wage for the average worker is now ‘catching up’ with the amount paid to supervisors.
Samuel’s employer, Peter Gibson, the director and co-founder of Grindsmith said the business is under strain as a result.
“With such a large increase this time, the minimum wage is now catching up to what we would pay our supervisors, so there must be some inflation in their wages as well.
“So for us, as a small business, it’s not just a pay increase for minimum wage [workers], it’s a pay increase across the company,” Mr. Gibson says.
To manage the rise in costs, The company has said that to manage the rising costs of running the business, it will consider increasing prices and cutting staff hours.
“Our hand’s being forced,” he says. “It’s not to make the company more money, it’s to make the exact same amount of money, at the end, but with higher prices.”
When does the minimum wage go up?
The minimum wage changes go into force from April 1, 2024.
How much has the minimum wage gone up?
The annual increases to the minimum wage and national living wage with effect from 1 April 2024 are as follows:
- 21 and over – £11.44 (increase of £1.02)
- 18-20 – £8.60 (increase of £1.11)
- 16-17 and apprentices – £6.40 (increase of £1.12)
Further information
Employment terms and conditions and breach of contract – Oakwood Solicitors
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