National Minimum Wage and National Living Wage rates

The minimum wage a worker gets depends on their age. The top tier of £10.42 is given to workers aged 23 years and over.

The National Minimum Wage is paid to employees up until the age of 23.  From 23 onwards, individuals receive the National Living Wage.

The first change is that, from 1^st April 2024, employees will receive the National Living Wage from the age of 21.

The second change is the rate of pay. 

As of 1^st April 2024:

• the National Living Wage (paid to employees who are 21 and older) will increase to £11.44
• the National Minimum Wage (paid to employees who aged between 18 and 20) will increase to £8.60. 
• There are also increases for apprentices and employees who are under 18.

The old and new rates for National Living Wage and National Minimum Wage are:

The increase in the National Minimum Wage and National Living Wage is seen as a positive step by the government to support the current cost of living crisis affecting workers across the UK. However, many businesses have been impacted by the challenging economy, and these increases could create financial issues.

Therefore, employers must consider preparing early for this increase. They need to consider calculating their staffing costs using the new rates to establish any risks to profit margins. They can then assess how best to mitigate those risks i.e. cost cutting measures and increase in prices could help.

Businesses of all sizes can prepare for this new employment law by ensuring that their finance, payroll, and HR departments are fully aware of the new rates. This is especially important if you have or are planning to bring an apprentice on board or if your employees are paid an hourly as opposed to an annual salary.

If you would like any help updating your contracts, policies or handbook or have any specific questions on how this change relates to your business, please do contact us.