It has been confirmed that the National Living Wage will rise by 6.6% to £9.50 per hour for people aged over 23, effective from April 2022. The increase is more than twice the current 3.1% rise in the cost of living.
Minimum pay rates for younger workers are also set to go up. The National Minimum Wage for people aged 21-22 will rise from £8.36 to £9.18 an hour and the Apprentice Rate will increase from £4.30 to £4.81 an hour.
Chancellor Rishi Sunak said the rise “ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament”.
However, the Federation of Small Businesses (FSB) National Chair Mike Cherry said: “Larger than expected increases in the Living Wage must be matched by support for those who will struggle to afford to maintain jobs, businesses need to see the extension of the small business Employment Allowance, which covers the first £4,000 of Employer NICs. Without an increase in the EA, the combination in April of higher wage bills and higher tax bills will see many more than the forecast of 50,000 people added to unemployment queues.”
In contrast, the TUC argued that the increase in NLW does not go far enough. TUC General Secretary Frances O’Grady said: “With Britain in the midst of a cost-of-living crisis boosting the minimum wage is vital. The government must set its sights higher. We need a £10 minimum wage now, and we need ministers to cancel the cut to universal credit.”