Minimum wage rates to increase from April 2022

Minimum Wage rates, also known as the National Living Wage (NLW), which is the statutory minimum wage for workers over 23, will rise to £9.50 from 1 April 2022. This represents an increase of 6.6% or 59 pence.

Recommendations by the Low Pay Commission puts the minimum wage on target to achieve the Government’s aim of two thirds of median earnings by the year 2024. These recommendations were accepted in full by the Government after being unanimously agreed by the Commissioners.

Minimum wage rates for younger workers

Alongside this National Living Wage increase, the Commission also recommended a significant rise in National Minimum Wage (NMW) rates for younger workers.

The rate for 21 to 22-Year-Olds is to increase to £9.18 per hour. National Minimum Wage rates for those aged 18 to 20 and 16 to 17 will increase proportionality with underlying wage growth. The minimum wage for apprentices will be brought in line with the rate for 16 to 17-Year-Olds, increasing it by 51 pence an hour.

The table below summarises the changes:

New rate from April 2022Existing rate (04/2021 to 03/2022) Percentage increase
National Living Wage (NLW)£9.50£8.916.6
Rate for 21 to 22-year-olds£9.18£8.369.8
Rate for 18 to 20-year-olds£6.83£6.564.1
Rate for 16 to 17-year-olds£4.81£4.624.1
Rate for apprentices£4.81£4.3011.9
Accommodation Offset*£8.70£8.364.1

* Where employers provide accommodation, this can be considered when calculating the NMW or NLW. Further information can be found here.

The National Living Wage is separate from the London Living Wage and the UK Living Wage, which are calculated by the Living Wage Foundation.

These are voluntary pay benchmarks that employers can voluntarily sign up to and are not legally binding requirements. The hourly rate of these Living Wages is based on an attempt to calculate need, in contrast to the National Living Wage, which is calculated on a target relationship between its level and the average pay.

The London Living Wage and the UK Living Wage apply to those workers aged 18 and above. The National Living Wage applies to workers aged 23 and above.

The Low Pay Commission is an independent body comprising trade unions, employers and experts. Its role is to advise the Government on minimum wage.

Alexander & Co – helping businesses

Whilst these increases are good news for employers, they are also likely to impact businesses, especially those that rely more heavily on labour.

For any businesses that may be impacted by these increases, Alexander & Co can advise on a wide range of measures to assist you. This may include advising on tax efficiencies,  business restructuring or audit services.

We work with a wide range of businesses across the UK, including manufacturing, construction and retail to name a few.

Please get in touch using the form below for further information email us at info@alexander.co.uk or call on 0161 832 4841.

 

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