Nearly 3 million low-paid workers will receive a pay increase of almost 10% next spring after Chancellor Jeremy Hunt announced an increase in the national living wage to £11.44 an hour. The chancellor said earnings of full-time workers would rise by £1,800 a year as a result of the move, which the Low Pay Commission (LPC) said met the 2019 Conservative pledge to end poverty pay in the UK.
The increase from £10.42 to £11.44 represents the largest ever cash increase in the low pay floor, coming against a backdrop of a cost of living crisis in which inflation peaked at 11.1% – the highest in 40 years. Eligibility for the national living wage will also be extended by reducing the age threshold from 23 to 21.
According to the Treasury, a 21-year-old will receive a 12.4% increase from £10.18 this year to £11.44 next year, worth almost £2,300 annually for a full-time worker. National minimum wage rates for younger workers will also increase, with those aged 18 to 20 getting a wage boost to £8.60 an hour – a £1.11 hourly pay rise.
Mr Hunt said: “Next April all full-time workers on the national living wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.” The Treasury estimates 2.7 million workers will directly benefit from the increase.
TUC general secretary Paul Nowak welcomed the rise but called for an uplift to £15 “as soon as possible”, noting that most pay packets have fallen in real terms over the last decade. Bryan Sanderson, chair of the Low Pay Commission, highlighted that the national living wage has delivered an improved standard of living to thousands of essential workers without increasing unemployment.
