National Living Wage (NLW) and other wage rates will increase from 1 April 2024.
The Autumn Statement confirmed acceptance of the Low Pay Commission’s (LPC) recommendations for next year.
These wage increases deliver on a Conservative manifesto pledge to ‘abolish low pay’, defined at below 66% of median earnings.
We’re acutely aware of the pressure this will put on sector businesses, with labour costs making up a substantial proportion of turnover.
Throughout the year we have been making representations to the LPC and to Government, highlighting the damage an increase of this magnitude could do to the sector.
We have also highlighted how this does not just impact entry-level staff but has ramifications throughout the management structure.
What are the new rates?
The new rates are as follows:
- 1
National Living Wage (21-years-old and over)
Rate from 1 April 2024: £11.44
Increase in pence: £1.02
Percentage increase: 9.8%
- 2
18- to 20-year-old rate
Rate from 1 April 2024: £8.60
Increase in pence: £1.11
Percentage increase: 14.8%
- 3
16- to 17-year old rate
Rate from 1 April 2024: £6.40
Increase in pence: £1.12
Percentage increase: 21.2%
- 4
Apprentice rate
Rate from 1 April 2024: £6.40
Increase in pence: £1.12
Percentage increase: 21.2%
- 5
Accommodation offset
Rate from 1 April 2024: £9.99
Increase in pence: £0.89
Percentage increase: 9.8%
The LPC’s remit was to ensure that the NLW reached 66% of median earnings, which it believes it has done. The forecast level to reach this at the Budget in March 2022 was £11.16 per hour but the high level of average earnings has pushed this up the target level.
Other wage bands have also increased as the LPC attempts to ensure there is not too great a discrepancy between them.
Beyond 2024
The LPC’s remit ran to 2024 and it has been consulting on views for a future remit. We responded to this review, urging the LPC to allow changes since 2019 to bed in before assessing the impact.
In effect, this would mean NLW would continue to increase at the rate of average earnings. We expect to hear the LPC’s findings early in the New Year.
With a General Election this year, the 2025 rate will likely be determined by a new Government.
