As we highlighted in an earlier post, the new rates for the National Living Wage and the National Minimum Wage that will apply from the 1st April 2024 were announced in advance of the 2023 Autumn Statement that was delivered by the Chancellor of the Exchequer, Jeremy Hunt, on the 22nd November 2023.
National Living Wage & National Minimum Wage Increases
The 2024 National Living Wage and National Minimum Wage increases that will apply from the 1st April 2024 will be as follows:-
- For workers aged 21 and over (i.e. the National Living Wage), the rate will increase by £1.02 per hour (9.8%) from £10.42 per hour to £11.44 per hour
- For workers aged 18-20 inclusive, the rate will increase by £1.11 per hour (14.8%) from £7.49 per hour to £8.60 per hour
- For workers aged 16-17 inclusive, the rate will increase by £1.12 per hour (21.2%) from £5.28 per hour to £6.40 per hour
- The apprentice rate will increase by £1.12 per hour (21.2%) from £5.28 per hour to £6.40 per hour
- The daily rate for the accommodation offset will increase by £0.89 (9.8%) from £9.10 to £9.99
Age Threshold Reduced
Within the announcement of the new rates for the National Living Wage and National Minimum Wage, it was confirmed that the age threshold for receiving the National Living wage will be reduced from 23 years of age to 21 years of age. Hence, all workers aged 21 and over will be entitled to be paid at least the National Living wage from the 1st April 2024, with those aged 21-22 years of age benefitting from an increase of £1.26 per hour (12.4%) from £10.18 per hour to £11.44 per hour.
National Living Wage: The April 2024 Target
The Government has had a target to increase the National Living Wage to two thirds of median earnings by April 2024. With the increase to £11.44 per hour, the Government has hit that target
The Real Living Wage & The London Living Wage
The Real Living Wage was increased on the 24th October 2023 by £1.10 per hour from £10.90 per hour to £12.00 per hour, an increase of 10.09%, with those employers who are signed up to the scheme expected to implement the new rate by the 1st May 2024. The rate for the London Living Wage was increased at the same time as the Real Living Wage, with the rate increasing by £1.20 per hour from £11.95 per hour to £13.15 per hour, an increase of 10.04%.
Hence, the new rate for the National Living Wage of £11.44 per hour that will apply from the 1st April 2024 will be £0.56 per hour lower than the Real Living Wage and £1.71 per hour lower than the London Living Wage.
Commenting upon the April 2023 increase in the National Living Wage, the Director of the Living Wage Foundation, Katherine Chapman, stated: "A rise in the statutory National Living Wage from next April is welcome news for low paid workers but it still falls short of the voluntary real Living Wage which is £12 per hour in the UK and £13.15 per hour for workers in London....As of April 2024 when the new Government's National Living Wage rises, a worker earning the real Living Wage would earn £1,092 a year more than someone on the government minimum, and £3,334.5 more for a worker earning the London Living Wage."
Low Pay Commission Recommendations
In setting the new rates 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: "We recommend a rate of £11.44 that should apply to those aged 21 and above. We expect this increase will meet the Government’s target of two-thirds of median earnings for those aged 21 and over by 2024. We believe this substantial increase will restore the real value that has been eroded through the recent cost of living crisis. Our judgement is that this increase will not significantly risk employment prospects."
