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What are the National Minimum Wage, National Living Wage and Real Living Wage? What are the National Minimum Wage, National Living Wage and Real Living Wage?
(25 days later)
Millions of workers across the UK have received a pay increase after the National Minimum Wage and National Living Wage rose on 1 April. Almost half a million workers will benefit as the Real Living Wage - an hourly rate amount voluntarily paid by some UK businesses - is going up by 5%.
The Real Living Wage - a higher amount voluntarily paid by some UK businesses - remains the same. Employees who receive the London Living Wage will get a 5.3% boost.
Millions of other low-paid workers across the UK saw their pay increase in April when the National Minimum Wage and National Living Wage went up.
What is the National Living Wage and how much is it?What is the National Living Wage and how much is it?
From 1 April, employees aged 21 and over became entitled to the National Living Wage. Previously, you had to be 23 to qualify. Since 1 April, employees aged 21 and over are entitled to the National Living Wage. Previously, you had to be 23 to qualify.
The rate increased to £11.44 an hour, up from £10.42.The rate increased to £11.44 an hour, up from £10.42.
The changes, which apply across the UK, mean:The changes, which apply across the UK, mean:
A full-time adult worker paid the minimum wage will receive a pay rise worth £1,800 a yearA full-time adult worker paid the minimum wage will receive a pay rise worth £1,800 a year
A 21-year-old, who moves from the lower minimum wage rate to the main rate, will get a £2,300 riseA 21-year-old, who moves from the lower minimum wage rate to the main rate, will get a £2,300 rise
What is the National Minimum Wage and how much is it?What is the National Minimum Wage and how much is it?
Younger employees - aged between 16 and 20, external - receive the National Minimum Wage.Younger employees - aged between 16 and 20, external - receive the National Minimum Wage.
The rates for this also increased on 1 April:The rates for this also increased on 1 April:
If you are 16 or 17, the National Minimum Wage is £6.40 an hour, up from £5.28If you are 16 or 17, the National Minimum Wage is £6.40 an hour, up from £5.28
If you are 18, 19 or 20, the National Minimum Wage is £8.60, up from £7.49If you are 18, 19 or 20, the National Minimum Wage is £8.60, up from £7.49
The separate apprentice rate,, external which applies to eligible people under 19 - or those over 19 in the first year of an apprenticeship - will be £6.40 an hour, up from £5.28.The separate apprentice rate,, external which applies to eligible people under 19 - or those over 19 in the first year of an apprenticeship - will be £6.40 an hour, up from £5.28.
The National Living Wage and National Minimum Wage are both set by the Department for Business and Trade every year on the advice of independent group, the Low Pay Commission, external.The National Living Wage and National Minimum Wage are both set by the Department for Business and Trade every year on the advice of independent group, the Low Pay Commission, external.
National Living Wage and National Minimum Wage rates go up every April.
Who can't get the National Minimum Wage or National Living Wage?Who can't get the National Minimum Wage or National Living Wage?
Those who don't qualify include:Those who don't qualify include:
self-employedself-employed
company directorscompany directors
volunteersvolunteers
members of the armed forcesmembers of the armed forces
people living and working in a religious communitypeople living and working in a religious community
prisonersprisoners
People with disabilities or in long-term unemployment who take part in government work programmes are paid fixed amounts at different stages of the scheme.People with disabilities or in long-term unemployment who take part in government work programmes are paid fixed amounts at different stages of the scheme.
These are less than the equivalent National Minimum or Living rate.These are less than the equivalent National Minimum or Living rate.
Do employers have to pay the National Minimum Wage and National Living Wage?Do employers have to pay the National Minimum Wage and National Living Wage?
Yes, it is a criminal offence if employers fail to pay the correct National Minimum and Living Wages to their workers.Yes, it is a criminal offence if employers fail to pay the correct National Minimum and Living Wages to their workers.
The rates apply to staff even if they are not paid by the hour.The rates apply to staff even if they are not paid by the hour.
Calculator: Am I getting the right wage?, externalCalculator: Am I getting the right wage?, external
If you think you are being paid incorrectly, you can complain via the HMRC website, external.If you think you are being paid incorrectly, you can complain via the HMRC website, external.
You can also get advice from workplace experts Acas, external.You can also get advice from workplace experts Acas, external.
What happens if employers don't pay the right National Minimum Wage or National Living Wage?What happens if employers don't pay the right National Minimum Wage or National Living Wage?
Any employer not paying the correct amount can be fined by HMRC.Any employer not paying the correct amount can be fined by HMRC.
In June 2023, the government said that more than 200 firms had been fined a total of nearly £7m and told to reimburse 63,000 workers for failures over several years.In June 2023, the government said that more than 200 firms had been fined a total of nearly £7m and told to reimburse 63,000 workers for failures over several years.
The companies included Marks and Spencer, Argos and Lloyds Pharmacy.The companies included Marks and Spencer, Argos and Lloyds Pharmacy.
WH Smith was the worst offender, having failed to pay more than £1m to more than 17,600 workers.WH Smith was the worst offender, having failed to pay more than £1m to more than 17,600 workers.
What is the Real Living Wage and how much is it?What is the Real Living Wage and how much is it?
The Real Living Wage, external is an unofficial hourly rate which is overseen by the Living Wage Foundation charity. It is based on the amount the charity believes people need to earn. The Real Living Wage, external is an unofficial hourly rate of pay which is overseen by the Living Wage Foundation charity. It is based on the amount of money the charity believes people need to earn.
It is aimed at UK workers aged 18 and over, but is not a legal requirement, and businesses choose whether to pay it.It is aimed at UK workers aged 18 and over, but is not a legal requirement, and businesses choose whether to pay it.
The charity says more than 460,000 employees working for 14,000 firms currently receive the Real Living Wage. The charity says more than 475,000 employees working for 15,000 firms, external currently receive the Real Living Wage.
The rate for workers in London - sometimes called the London Living Wage - is £13.15 an hour. The rate for workers in London - the London Living Wage - is going up by 70p to £13.85 an hour.
In the rest of the UK, it is £12. In the rest of the UK, a 60p increase will take the rate to £12.60.
A qualifying full-time worker in London would earn £5,323 more than someone on the National Living Wage. Employers must implement the new rates by 1 May 2025.
Someone on the Real Living Wage outside the capital would earn £3,081 more than someone on the National Living Wage. Announcing the new rates, the charity said the Real Living Wage was now worth over £2,262 more per year in the UK than the legal minimum pay - and over £4,700 more in London
The charity points out that - unlike the National Minimum Wage - the Real Living Wage has kept up with the rising cost of living. It says the scheme has delivered nearly £3.5bn in extra wages to low-paid workers since 2011.
The CPI measure of inflation rose by 17.4% between September 2021 and September 2023. Over the same period the Real Living Wage for the UK went up by 21.2% (19% in London).
By comparison, the National Minimum Wage increased by less than CPI between April 2021 and April 2023.
In February 2024, the charity said it had found that one in eight UK jobs paid less than its suggested hourly rate, external, with the highest concentration of low-paid jobs in the north-east of England (15.9%), the East Midlands (15.7%) and Northern Ireland (15.6%).
How does your pay compare with other jobs?How does your pay compare with other jobs?
When were the National Minimum Wage and National Living Wage introduced?When were the National Minimum Wage and National Living Wage introduced?
The National Minimum Wage came into force under the Labour government in 1999.The National Minimum Wage came into force under the Labour government in 1999.
It started at £3.60 an hour for those 22 and older, and £3 for 18-21-year-olds.It started at £3.60 an hour for those 22 and older, and £3 for 18-21-year-olds.
The Conservative government introduced the National Living Wage for workers aged over 25 in 2016.The Conservative government introduced the National Living Wage for workers aged over 25 in 2016.
It was initially set at £7.20 an hour - 50p more than the National Minimum Wage. The qualifying age fell to 23 in 2021.It was initially set at £7.20 an hour - 50p more than the National Minimum Wage. The qualifying age fell to 23 in 2021.