Posted Date: 7th December 2022

The Chancellor of the Exchequer has recently confirmed an increase to the National Minimum Wage and National Living Wage. This means that from April 2023 the National Living Wage for those aged 23 and over will increase by 9.7% (£9.50 to £10.42 an hour).

See new rates below:

Age 23 and over  - £10.42 (9.7% increase)

21-22 year olds- £10.18 (10.9% increase)

18-20 year olds - £7.49 (9.7% increase)

16-17 year olds - £5.28 (9.7% increase)

Apprentice- £5.28 (9.7% increase)

Accommodation offset (daily)- £9.10 (4.6% increase)

The new rates were recommended by the Low Pay Commission and is said to be the “biggest ever increase in the minimum wage”, resulting in an annual pay rise of over £1,600. Whilst being the biggest increase to date, many have stated they will still struggle as the cost of living continues to push households.

At the same time, increased wages may be a concern for employers who are facing high expenses in their businesses, leading to changes and complicated decision making. Whilst being essential, the increase has been described as a ‘double edged sword’ especially for many of the small businesses facing tough energy costs and already feeling pushed to the edge.

Other Changes to Statutory Rates

The Department for Work and Pensions has also published annual increases for 2023/2024. The rate for statutory adoption, shared parental, parental bereavement, paternity, and maternity pay will increase from £156.66 to £172.48 per week. The rate for statutory sick pay will also increase from £99.35 to £109.40 per week.

What should you do?

We recommend that you conduct a pay audit on your workforce, before April 2023, to ensure that all employees are paid within the correct bracket. You should also check the birthdays of workers over the next 12 months, as they may be entitled to an increase part way through the year which you should diarise or increase from 1st April in advance.

All workers, except for those who are genuinely self-employed, are entitled to the National Minimum / Living Wage.

For further information on changes to the Miminum wage, Living wage and statutory rates contact our HR advisors who are here to help.