The new rates that will apply from April 2022 for the National Living Wage and the National Minimum Wage were recently announced by the Chancellor of the Exchequer, Rishi Sunak, in the Autumn Budget and Spending Review 2021 on the 27th October 2021. In the Budget, the Chancellor announced that the National Living Wage will increase from £8.91 per hour to £9.50 per hour from the 1st April 2022, an increase of 6.6%.
At the same time, the Chancellor also confirmed the new rates in relation to the National Minimum Wage for younger workers, which will also increase from the 1st April 2022.
In setting the new rates for the National Living Wage and the National Minimum Wage, the Chancellor accepted the recommendations made by the Low Pay Commission in full.
National Living Wage & National Minimum Wage Increases
The 2022 National Living Wage and National Minimum Wage increases that will apply from the 1st April 2022 will be as follows:-
- For workers aged 23 and over (i.e. the National Living Wage), the rate will increase by 6.6% from £8.91 per hour to £9.50 per hour
- For workers aged 21-22 inclusive, the rate will increase by 9.8% from £8.36 per hour to £9.18 per hour
- For workers aged 18-20 inclusive, the rate will increase by 4.1% from £6.56 per hour to £6.83 per hour
- For workers aged 16-17 inclusive, the rate will increase by 4.1% from £4.62 per hour to £4.81 per hour
- The apprentice rate will increase by 11.9% from £4.30 per hour to £4.81 per hour
- The daily rate for the accommodation offset will increase by 4.1% from £8.36 to £8.70
National Living Wage: The April 2024 Target
The Government has a target to increase the National Living Wage (NLW) to two thirds of median earnings by April 2024. To have reached that target by April 2022, the NLW would have had to have increased to £9.58 per hour. In its projections, the Low Pay Commision estimate that the NLW will need to rise to £10.70 per hour in April 2024 to hit the target
The Real Living Wage & The London Living Wage
The Real Living Wage was last increased on the 9th November 2020 by 20p per hour from £9.30 per hour to £9.50 per hour. The rate for the London Living Wage was last increased on the same date, with the rate increasing by 10p per hour from £10.75 per hour to £10.85 per hour. The new rates for both are due to be announced on the 15th November 2021.
Commenting upon the April 2022 increase in the NLW, the Director at the Living Wage Foundation, Graham Griffiths, stated: "The rise in the National Living Wage is a positive step for so many workers who have been working hard and struggling to make ends meet. This significant increase...will go some way to easing the pressure on households feeling the squeeze, but there is still a substantial gap between the government’s 2022 rate and the rising cost of living."
Griffiths added: "The past 18 months has been a perfect storm for us all, with fuel and energy costs rising and cuts to household incomes meaning many workers and their families are trapped in low pay. On the 15th November, as part of Living Wage Week, the new real Living Wage rates will be announced and take effect to reflect the steep rise in living costs. The Living Wage Foundation’s real Living Wage remains the only rate that’s based on what workers and their families need to get by: the weekly shop, energy bills, a school uniform for growing kids; even a trip to the dentist."
Low Pay Commission Recommendations
In setting the new rate for the National Living Wage, the Government implemented the recommendations from the Low Pay Commission in full.
The Chair of the Low Pay Commission, Bryan Sanderson, stated: "The economic situation has improved substantially since last year, with GDP approaching its precrisis level earlier than predicted and relatively strong growth expected next year. The labour market has also recovered strongly.....[although], inter-related issues affecting global supply chains, rising input costs and staff availability present some near-term risks....Due to the improved economic situation our aim was to recommend a rate that put us back on course to meet the 2024 target set out in our remit."
