April 1st 2023 Changes to the UK National Living and Minimum Wage
Low-earning workers in the UK could see a rise in take-home pay thanks to the scheduled increase in both the National Living Wage and the National Minimum Wage this April.
- The UK Government has announced that the changes will be effective from 1st April 2023.
- The Government will increase the National Living Wage by 9.7%, from £9.50 to £10.42, for workers aged 23 years and over.
- The increase is the most significant rise in the National Living Wage, marking a 92 pence increase per hour for earners.
- From April 2023, the rise of the National Living Wage means that a full-time employed earner will receive roughly £150 extra each month.
- Earners under the age of 23 will also see increases in their take-home pay, with those aged between 16 and 20 also receiving a 9.7% increase in their wages on the National Living Wage.
- The increases come during a period of economic difficulty for the UK, with the rise in low earners’ wages set to come in whilst many workers’ unions across the UK are negotiating for higher wages for their members.
How much will wages be increasing for different age groups?
Wages are set to increase across the board from April 1st 2023, with varying increases across different age groups:
- National Living Wage – Increased to £10.42 (+9.7%)
- 21-22 year old rate – Increased to £10.18 (+10.9%)
- 18-20 year old rate – Increased to £7.49 (+9.7%)
- 16-17 year old rate – Increased to £5.28 (+9.7%)
- Apprentice Rate – Increased to £5.28 (+9.7%)
- Accommodation Offset – Increased to £9.10 (+4.6%)
Why has the UK National Living and Minimum Wage increased?
The changes were announced by the UK Government following recommendations made by the Low Pay Commission, which is responsible for supporting both the wages and living standards of low-paid workers in the UK. The changes to the wage rates are set to be a reflection of the general UK economic climate.
Bryan Anderson, Chair of the Low Pay Commission, said: “The rates announced today include the largest increase to the NLW since its introduction in 2016 and will provide a much-needed pay increase to millions of low-paid workers across the UK”.
“For a full-time worker, today’s increase means nearly £150 more per month. The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.”
How will the increases in wages affect my business?
Businesses may certainly see changes to their bottom line with the rise in wages, and some speculate that unemployment may rise as businesses seek to reduce their spending on the workforce. However, whilst a rise in wages will mean employers need to spend more per employee, rises in retention rates and employee satisfaction may offset the cost of the increase.
For a comprehensive discussion of your business, and how the changes may affect your operations, and for a consultation of your people management and human resources, contact the HR experts at Aible – HR Services.
