2022 Autumn Statement: national minimum wage increases announced for April 2023

/ employment

On 17 November 2022, Jeremy Hunt announced that the UK Government, in its Autumn Statement has accepted the Low Pay Commission’s proposed increases to the national living wage (NLW) and national minimum (NMW) rates from April 2023.

About the National Minimum Wage (NMW)

The national minimum wage (NMW) is a prescribed minimum hourly rate of pay which employers must legally pay to most of their workers.  There are five different rates of NMW for different age-related categories of worker:

  • National living wage. Since 6 April 2021 this applies to workers aged 23 or over.

  • Standard (adult) rate. For workers aged 21 and 22.

  • Development rate. For workers aged between 18 and 20 inclusive.

  • Young workers rate. For workers aged under 18 but above the compulsory school age, that are not apprentices.

  • Apprentice rate. For apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship.

The new rates from 1 April 2023:

  • Age 23 or over (NLW rate): £10.42 (up 9.7% from £9.50)

  • Age 21 to 22: £10.18 (up 10.9% from £9.18)

  • Age 18 to 20: £7.49 (up 9.7% from £6.83)

  • Age 16 to 17: £5.28 (up 9.7% from £4.81)

  • Apprentice rate: £5.28 (up 9.7% from £4.81)

  • Accommodation offset amount: £9.10 (up 4.6% from £8.70)

Workers across the UK will welcome this announcement; however, employers will need to carefully plan for the impacts of increased staffing costs. Opponents of the move were quick to point out the 'benefit' is only if businesses can afford the increase, with increasing fears that some employers will find the challenge of paying an extra 92 pence per hour to be one challenge too far.