In the Autumn statement on 17 November 2022, it was confirmed that the National Living Wage (NLW), paid to those aged 23 and over, will rise to £10.42 per hour from 1 April 2023, as recommended by the Low Pay Commission (LPC).
The increases announced will see a rise in the pay for an NLW worker working 37.5 hours per week by £1798.83 (annually) and £149.90 (monthly).
This is an increase of 9.7 %, the largest ever increase to the NLW, and ensures that the NLW continues on track to reach the Government’s target of two-thirds of median earnings by 2024.
Changes to the National Minimum Wage (NMW) have also been announced. All of the increases are set out below:
Statutory Living Wage Rates Table 2023Statutory Rates from Autumn Statement 2022
(April 2022 to March 2023)
|Rate from April 2023|
|National Living Wage||£9.50 per hour||£10.42 per hour|
|21-22 Year Old Rate||£9.18 per hour||£10.18 per hour|
|18-20 Year Old Rate||£6.83 per hour||£7.49 per hour|
|16-17 Year Old Rate||£4.81 per hour||£5.28 per hour|
|Apprentice Rate||£4.81 per hour||£5.28 per hour|
|Accommodation Offset||£8.70 per hour||£9.10 per hour|
Note: Apprentices are entitled to the apprentice rate if they’re either:
- aged under 19
- aged 19 or over and in the first year of their apprenticeship.
Apprentices become entitled to the minimum wage for their age if they are aged 19 or over and have completed the first year of their apprenticeship.
The new rates for maternity, paternity, adoption, parental bereavement and shared parental payments and statutory sick pay have also been announced by the Department of Work and Pensions. These are to be applied from April 2023.
The rate for 2023/24 for statutory maternity (SMP), paternity (SPP), adoption (SAP), parental bereavement (SPBP) and shared parental pay (ShPP) will increase from £156.66 to £172.48 per week.
The rate of statutory sick pay (SSP) is also set to increase from £99.35 to £109.40 per week.
The minimum weekly amount an individual must earn to be entitled to these payments will remain at £123.
Employers who have employees on sickness absence, maternity leave, etc., in the run-up to April 2023 must remember to factor in the increases for these employees where their absence continues past the rate change date, as well as employees who go on sick leave, maternity leave, etc. after the new National Living Wage rates are in place.
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New living wage implementation date
It should be noted that as with previous years, these rates did not all increase on the same date. From 02 April 2023, the increase to SMP, SPP, etc, was applied, whereas SPP increased from 06 April 2023.
Real Living Wage and Living Hours
The real living wage is the wage rate independently calculated based on rising living costs.
The Living Wage rates are calculated by the Resolution Foundation and overseen by the Living Wage Commission and are based on a core ‘basket of goods and services’ that people in the UK believe is necessary to meet everyday needs.
The current real living wage rate is £10.90 per hour across the UK and an hourly rate of £11.95 in London. There are now over 11,000 accredited Living Wage Employers in the UK, and this movement continues to grow. For example, the Premier League’s Everton FC has signed the Living Wage Foundation Pledge, demonstrating its ongoing commitment to the Living Wage as a Principal Partner of the national movement.
There are also a number of employers in the UK who are going beyond the real living wage by providing guarantees of a minimum of 16 hours per week, a month’s notice of shift patterns and a contract that reflects the hours worked.
The Living Wage Foundation encourages employers, where they can afford it, to pay their employees a wage that meets the real cost of living rather than just the government minimum.
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