New law: Living Wage and National Minimum Wage rates confirmed for April 2023

The new national living wage and national minimum wage rates for the various categories of worker are as follows:

• The national living wage rate for workers aged 23 or over increases to £10.42 per hour (previously £9.50).
• The national minimum wage rate for workers aged 21 to 22 increases to £10.18 per hour (previously £9.18).
• The rate for workers aged 18 to 20 increases to £7.49 per hour (previously £6.83).
• The rate for workers who are under 18 but above the compulsory school age increases to £5.28 per hour (previously £4.81).
• The apprentice rate for workers aged under 19 or in the first year of an apprenticeship also increases to £5.28 per hour (previously £4.81).
• The accommodation offset (the maximum daily amount an employer can take into account when calculating whether the living wage or minimum wage has been paid, where accommodation is provided to a worker) increases to £9.10 per day (previously £8.70).

The large increase of 10.9 per cent in the rate payable to those aged 21-22 is because the Low Pay Commission (LPC) has recommended that they should be paid the National Living Wage by 2024. The government’s aim is therefore to phase increases in such a way as to avoid one, huge increase for them in 2024.

Operative date

• 1 April 2023

Recommendation

• Employers should budget and prepare for the new rates, from 1 April 2023.