The UK Announces Substantial Increase in National Living Wage and Minimum Pay Rates

Chancellor Jeremy Hunt has unveiled a significant boost to the UK’s hourly national living wage, set to rise by almost 10% from April next year.

Following recommendations from the Low Pay Commission, the announcement sees the national living wage increase to £11.44 per hour, marking the most significant cash increase ever recorded and equating to an annual rise of £1,800 for those on the lowest income.

Notably, the national living wage expansion will now encompass 21 and 22-year-olds, impacting approximately two million individuals. Previously, the wage only applied to Britons aged 23 and older.

In addition to the national living wage hike, the minimum wage rates are set for substantial increases. Individuals aged 18 to 20 will witness their minimum wage climb to at least £8.60 per hour, reflecting an increase of £1.11.

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Meanwhile, those aged 16 and 17, as well as apprentices, will experience their minimum pay rise to £6.40 per hour, marking an increase of £1.12 compared to the previous year.

Chancellor Jeremy Hunt expressed that the move aims to address low pay in the country, fulfilling a manifesto promise and building on the positive impact of the national living wage since its introduction in 2016. Laura Trott, the chief secretary to the Treasury, emphasized that the decision reflects the government’s commitment to combat inflation and enhance the economic landscape.

Since its inception in 2016, the national living wage has played a pivotal role in reshaping wage dynamics, with the Treasury highlighting a significant reduction in the proportion of workers on low hourly pay from 21.3% in 2010 to 8.9% today.

The government contends that coupled with increases in the national living wage, doubling personal tax thresholds has allowed working individuals to earn £1,000 a month tax-free for the first time, reinforcing their commitment to ensuring that work always pays.


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