National Living Wage to be Increased to £9.50 an Hour

With the government recently announcing their autumn budget, there are a lot of new measures that will have an impact on both individuals and businesses. Perhaps one of the biggest talking points was the increase to the National Living Wage and National Minimum Wage.

So, whether you’re an individual or a business, let us guide you through the ins and outs of the increase and what you should be doing to prepare for it.

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The Difference Between National Living Wage and Minimum Wage

Putting it simply, the National Minimum Wage rate differs based on your age and whether you are employed as part of a company, or studying as an apprentice. The rate will typically increase with age, whereas apprentices will be working at the same rate.

Conversely, the National Living Wage is a fixed rate that applies to those who are 23 and over. This is set at a higher rate than the National Minimum Wage under the assumption that those under 23 will likely be living at home and have fewer overheads, and those who are over 23 will have extra responsibilities and costs such as rent or supporting children.

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National Living and Minimum Wage Increase Details

Coming into effect on 1st April 2022, there will also be an increase to the National Minimum Wage on this date.

  • The National Living Wage for over-23s will increase from £8.91 to £9.50 an hour
  • The National Minimum Wage for those ages 21-22 will increase from £8.36 to £9.18
  • For those between the ages of 18-20, the National Minimum Wage will increase from £6.56 to £6.83
  • The National Minimum Wage for those under 18 will increase from £4.62 to £4.81
  • The Apprentice Rate will increase from £4.30 to £4.81
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What it Means for Employers

With these upcoming changes, employers must ensure that they are carrying out certain procedures in order to meet the new requirements and that workers are being paid in line with the new National Living Wage and the National Minimum Wage.

We would recommend putting processes in place that identify when workers move to a new age bracket within the confines of the National Minimum Wage, or when they are old enough to move from the National Minimum Wage to the National Living Wage.

When the new wage increases come into effect in April 2022, you must ensure that you are meeting the requirements and pay rates for your employees.

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