The government today accepted the recommendations by the Low Pay Commission (LPC) on minimum wage rates from April 2023.
The National Living Wage (NLW) will rise to £10.42 from 1 April 2023, an increase of 92 pence or 9.7 per cent.
The LPC said the rate will ensure that the NLW continues on track to reach the government’s target of two-thirds of median earnings by 2024.
The agency added that the increases will support the wages and living standards of low-paid workers at a time when many are feeling increased pressure from a rising cost of living.
“The rates announced today include the largest increase to the NLW since its introduction in 2016 and will provide a much-needed pay increase to millions of low-paid workers across the UK, all of whom will be feeling the effects of a sharply rising cost of living. For a full-time worker, today’s increase means nearly £150 more per month,” Bryan Sanderson, Low Pay Commission Chair, said.
“The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.”
Sanderson claimed that the recommendations have the full support of the business, trade union and academic representatives who make up the Commission.
“Businesses also have to navigate these economically uncertain times and by ensuring we remain on the path to achieve our 2024 target, employers will have greater certainty over the forward path,” he added.
Alongside the NLW, the Commission recommended significant increases in the National Minimum Wage (NMW) rates for younger workers.
The 21-22 Year Old Rate will increase to £10.18, narrowing the gap with the NLW and leaving this age group on course to receive the full NLW by 2024. Following LPC recommendations in 2019, the age threshold for the NLW was lowered from 25 to 23 in April 2021 and is due to be lowered to 21 by 2024.
NMW rates for 18-20 and 16-17 year olds and apprentices will increase in line with the NLW increase of 9.7 per cent in recognition of the tight labour market and strong demand for labour in youth-friendly sectors.
| Rate from April 2023 | Current rate (April 2022 to March 2023) | Increase | |
| National Living Wage | £10.42 | £9.50 | 9.7% |
| 21-22 Year Old Rate | £10.18 | £9.18 | 10.9% |
| 18-20 Year Old Rate | £7.49 | £6.83 | 9.7% |
| 16-17 Year Old Rate | £5.28 | £4.81 | 9.7% |
| Apprentice Rate | £5.28 | £4.81 | 9.7% |
| Accommodation Offset | £9.10 | £8.70 | 4.6% |
