Record wage boost for nearly 3 million workers next year

• Biggest ever increase to the National Living Wage, worth over £1800 a year for a full-time worker, fulfils manifesto pledge to end low pay. 
• Since 2010 the National Living Wage will have doubled in cash terms from around £10500 to nearly £21000 a year for a full-time worker. 
• For the first time, 21 year olds on the National Living Wage will always earn two-thirds of average earnings.

The Chancellor will deliver a pay rise of more than £1800 a year for a full-time worker, as he confirms that the National Living Wage will increase by over a pound an hour from April.

The almost 10% pay boost, from £10.42 to £11.44, an hour is the biggest cash increase in the National Living Wage in more than a decade and fulfils the government’s manifesto pledge to end low pay for those on the National Living Wage.  

Eligibility for the National Living Wage will also be extended by reducing the age threshold to 21-year-olds for the first time.  A 21-year-old will get a 12.4% increase, from £10.18 this year to £11.44 next year, worth almost £2300 a year for a full-time worker. 

National Minimum wage rates for younger workers will also increase. 18-20 year olds will get a wage boost to £8.60 per hour – a £1.11 hourly pay bump.  

The Department for Business and Trade estimate 2.7m workers will directly benefit from the 2024 National Living Wage increase.

Chancellor of the Exchequer Jeremy Hunt said: 

“Next April all full-time workers on the National Living Wage will get a pay rise of over £1800 a year. That will end low pay in this country, delivering on our manifesto promise.

“The National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.”

The minimum hourly wage for an apprentice is boosted next year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by over 20%, going from £5.28 to £6.40 an hour.  

The National Living Wage was introduced in 2016 and currently sets the minimum hourly pay a person over the age of 23 earns when working. The new rate will now apply to 21- and 22-year-olds, and means that the government has met its ambitious target of lifting the National Living Wage to two-thirds of median earnings by 2024, ending low hourly pay for those on the National Living Wage.  

Since 2010, the proportion of workers on low hourly pay has more than halved from 21.3% to 8.9%, supported by increases to the National Living Wage. Personal tax thresholds have been doubled, meaning a working person can now earn £1000 a month tax-free for the first time.  

Getting more people into work and ensuring work pays is a priority for the government. The Chancellor will set out further measures in tomorrow’s Autumn Statement.

Sector Response

Nye Cominetti, Principal Economist of the Resolution Foundation, said:

“The more than £1 an hour increase in the National Living Wage next year is huge – the third biggest rise ever in both cash and real terms. At least 1.7 million workers across Britain will benefit from this latest rise, and many more will see their wages boosted indirectly.

“The minimum wage is one of Britain’s greatest ever policy triumphs – playing a key role in reducing low pay to a record low, and benefitting women and younger workers in particular. But it can’t be the only tool we use to improve people’s working lives. We now need to build on its success to drive up wider working conditions for low earners in terms of job security and access to holiday and sick pay.”

TUC General Secretary Paul Nowak said: 

“This is badly needed and follows pressure from unions and low-pay campaigners. But with bills sky-high the minimum wageshould be raised to £15 an hour as soon possible.

“And let’s not lose sight of the bigger picture. Most working people’s pay packets have fallen in real-terms for the last decade – the worst squeeze in earnings in more than 200 years.

“The Conservatives have overseen record levels of in-work poverty. And they have not lifted a finger to help low-paid workers stuck in insecure work, who are often the victims of wage theft and other abuses.

“The failure of the Tories to deliver on their promise of an employment bill will leave millions at risk of being treated like disposable labour.”

On the role of the Low Pay Commission, Paul added:

“Today’s much-needed rise to the minimum wage shows the enduring impact of having representatives of business and unions on the Low Pay Commission, which recommends the rate.

“This ensures that worker and employer interests as well as the wider economy and labour market are considered. It is a template for better policy making.”

TUC analysis shows that 1.5 million more working people are living in poverty than in 2010.

Kate Shoesmith, REC Deputy Chief Executive, said:

“This rise rightly takes into account both cost of living increases and the slow path of pay growth over the last decade or so. It will be a challenge for some employers to adapt but it should help make working in some sectors that are experiencing labour shortages, such as hospitality, care and retail, more attractive at a time when our data shows more than two million job postings in the UK.

“But pay is not the only thing workers require – flexible work that allows someone to manage their other life commitments is often top of the list for jobseekers. The NLW increase today should also serve as a reminder to employers to think about how they can offer a rounded package if they want to attract and retain talent in this market.”

• The OECD defines low pay as those earning less than two-thirds of average earnings.
• The National Minimum Wage rate for those aged 22+ was £5.80 from 1 October 2009 to 31 September 2010 . A worker working full-time would have received around £10,500 a year gross, whereas it will be almost £21,500 for a NLW worker from April 2024. 

 Number of workers directly benefitting from NMW and NLW  

• See previous rates here.  
• The NLW and NMW are the minimum pay per hour workers are entitled to. As at 2023-24, workers over the age of 23 are entitled to the National Living Wage (NLW). This will now be extended to those aged 21+ in 2024-25. The NLW and NMW policy apply UK-wide.  

Number of workers directly benefitting from NMW and NLW by country  

Number of workers directly benefitting from NMW and NLW by English region