Millions Of UK Workers Will Get A Pay Rise From Next Week

In what seems like a rare spot of good news, millions of UK workers are set to see a boost in their wages from next week.

Roughly 3 million people should see an extra £1,400 a year in their pay packets after the the government confirmed that (what it terms) the National Living Wage is to be increased by 6.7%.

What is the National Living Wage?

The National Living Wage (NLW) is the highest rate of the National Minimum Wage (NMW) in the UK. It is set by the government and is the minimum hourly rate that can be paid to anyone over the age of 21.

What is the Real Living Wage?

It's important to note that the National Living Wage is a government-mandated minimum, while the ‘Real Living Wage’ is a higher, independently calculated voluntary wage rate based on the cost of living.

Promoted by the Living Wage Foundation, the Real Living Wage is £12.60 an hour (£13.85 an hour in London). There are currently over 15,000 Living Wage employers in the UK including some big household names like Ikea, Oxfam, Lush and KPMG.

When were the changes announced?

The news was confirmed by Chancellor Rachel Reeves while she delivered the Spring Statement on Wednesday (26th March), months after she first revealed the plans in October last year.

Reeves had previously described the move as a 'significant step' towards fulfilling Labour's manifesto promise of bringing in a 'genuine living wage for working people’.

Speaking in the House of Commons, Reeves said she was 'proud' of what Sir Keir Starmer's party has done since taking office.

"This Labour government was elected to bring change to our country," she said. "To provide security for working people and to deliver a decade of national renewal.

"That work of change began in July - and I am proud of what we have delivered in just nine months. Restoring stability to our public finance, giving the Bank of England the foundation to cut interest rate three times since the general election.

"Rebuilding our public services with record investment in our NHS, bringing waiting lists down for five months in a row...and increasing the National Living Wage to give three million people a pay rise from next week.

"Now, our task is to secure Britain’s future in a world that is changing before our eyes.”

How much is the new National Living Wage?

The increased wage will be introduced from Tuesday (1st April), and will see pay rise from £11.44 an hour to £12.21 an hour, meaning people will be getting 77p more for each hour they work.

According to Downing Street, this means Brits earning the living wage and working a full time job will take home £1,400 more in pay a year.

There will also be bigger pay rises for other tiers of the National Living Wage - as the top rate is for those aged 21 and above - and apprentices will also see a rise in their pay.

18 to 20-year-olds on the living wage will be getting a 16.3% increase in pay, with their rate increasing from £8.60 an hour to £10 an hour, while under-18s and apprentices will see the biggest rises as their hourly rate moves from £6.40 to £7.55 an hour.

Apprentices who are aged 19 or over and have completed the first year of their apprenticeship then get shifted up to their age appropriate level of pay.

Are you an apprentice? Don't forget that all apprentices in the UK are eligible to join TOTUM!

The 'accommodation offset' - AKA a daily deduction from wages to pay for accommodation costs - has risen from £9.99 to £10.66 a day.

The age at which Brits have been paid the living wage has lowered in recent years, in 2021 it dropped from 25 to 23 and last year it dropped from 23 to 21.

The government is looking at further reducing it from 21 to 18 in the future, increasing the number of Brits who would be paid the top rate of living wage.