New national minimum wage rates set for 2023

The Government raised the national living wage (NLW) at the start of April. This is an obligatory minimum wage payable to workers in the UK aged 23 and over. If you are 23 years old or above and classed as a “worker”, you are entitled to the NLW (also known as the minimum wage).

Although wages have been rising at their fastest rate in more than 20 years, the cost of living is rising quicker.

The full increases from 1 April 2023 are:

• National Living Wage (23+) has increased 9.7%, from £9.50 to £10.42
• National Minimum wage (21-22) has increased 10.9%, from £9.18 to £10.18
• National Minimum Wage (18-20) has increased 9.7%, from £6.83 to £7.49
• National Minimum Wage (under 18) has increased 9.7%, from £4.81 to £5.28
• Apprentice Rate has increased 9.7% from £4.81 to £5.28
• The Accommodation Offset also increased 4.6% from £8.70 to £9.10

This change came into effect on April 1, 2023.

Business and Trade Minister Kevin Hollinrake said:

“This government is doing everything it can to support hardworking people with the cost of living – from paying energy bills to helping with childcare. Today we are now increasing the National Living Wage to record levels, boosting the incomes of almost 3 million people. This pay rise will help families across the country, as we focus on our five priorities, including growing the economy and halving inflation.”

The real living wage, set by the Living Wage Foundation, is £10.90 in the UK, and £11.95 in London.

The Low Pay Commission estimates that 45% of all jobs paying at or below the minimum wage are in retail, hospitality, and cleaning and maintenance occupations.

The Living Wage Foundation has pointed out that a UK worker earning the national living wage would need an extra £936 each year to bring their income in line with the real living wage. This difference amounted to more than three months of food bills (14 weeks) or 11 weeks of housing and energy costs, according to national averages.

It added that with the cost of living in the capital higher than the rest of the UK, a worker living in London and being paid the government’s national living wage would need to find £2,983.50 extra to bring their earnings in line with the London living wage. This difference represents over nine months of food bills (38 weeks), or over five months of housing and energy costs (21 weeks).

Katherine Chapman, director of the Living Wage Foundation, said:

“This significant rise in the national living wage is a welcome boost to ease some of the pressure inflation continues to pile onto low-paid workers. It remains lower than the real living wage which is based on the cost of living – but the good news is we have seen record numbers of employers signing up to pay the higher real Living Wage to protect their lowest paid staff during these tough times.”

If someone is concerned that they’re not being paid the correct wage, they should speak to their employer. If the problem is not resolved, they can contact Acas (the Advisory, Conciliation and Arbitration Service) by phoning 0300 123 1122, or complain to HMRC in confidence using the link www.gov.uk/minimum-wage-complaint.