How much will the minimum wage go up? When national living wage will rise in 2023

Chancellor Jeremy Hunt announced his Autumn Statement to Parliament today as the UK is in the grip of a cost of living crisis.

He announced a series of measures including tax rises and spending cuts as well as an increase to the minimum wage, a move expected to benefit around two million workers.

Here is what we know about the increase and when the rise will take effect.

How much is the minimum wage increase?

Mr Hunt said the minimum wage will be increased by 9.7 per cent or 92 pence to £10.42 pounds per hour from April next year for people aged 23 and over.

The current minimum wage is £9.50 for this age group.

Mr Hunt told Parliament: “I am accepting the recommendation of the Low Pay Commission to increase it next year by 9.7 per cent. That means, from April 2023, the hourly rate will be £10.42, which represents an annual pay rise worth over £1,600 pounds to a full-time worker.”

However, the 9.7 per cent rise is below the rate of inflation, which is currently at a 41-year high of 11.1 per cent.

Figures released by the Office for National Statistics (ONS) showed that UK has already suffered a 2.7 per cent real-terms pay cut in the last year and are “among the largest” falls since comparable records began.

What is the minimum wage for other age groups and their rises?

The national minimum wage, also known as the National Living Wage (NLW), for those aged 16 to 17, is currently £4.81 an hour, which will go up by 9.7 per cent to £5.28 per hour.

For people aged 18 to 20, it is £6.83 per hour and will rise by 9.7 per cent to £7.49 per hour.

And for those aged 21 to 22, it is £9.18 per hour and will rise by 10.9 per cent to £10.18 per hour.

The apprentice rate, which is currently £4.81 an hour, will rise by 9.7 per cent to take it to £5.28 per hour.

While the Living Wage Foundation welcomed the announcement, they said the living wage rates would still be lower than the voluntary so-called real living wage of £11.95 in London and £10.90 outside the capital.

Katherine Chapman, director of the Living Wage Foundation, said: “There are now over 11,000 employers committed to always paying their staff, including contractors like cleaners and security guards, the real Living Wage.

“Living Wage Employers provide stability and certainty to the employees who will need it most ahead of a tough winter.

“This helps move us towards a high-wage, high-growth economy as employees earning a decent wage are likely to be more productive and able to spend in their local economies.”

Jake Shepherd, Senior Researcher at the think-tank the Social Market Foundation said: “In meeting the Low Pay Commission’s recommendations to raise the National Living Wage, the Chancellor has provided a much-needed boost for low-paid workers. The increase will give millions of households additional spending power and help them to absorb living costs – it is an announcement many will be grateful for.

“But the 9.7% uprating is still not in line with inflation. For many workers, the new rate will not be enough to meet the cost of living. Equally, businesses continue to stare down the barrel of growing overhead pressures. For some, particularly smaller films, it will be a tough challenge to rise to the new requirements. Some may even feel the need to pass on their wage bills to the consumer.”

When will it rise?

The rise to the minimum wage will take effect from April 2023.

Bryan Sanderson, Low Pay Commission Chair, said: “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.

“The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.

“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.

“These recommendations have the full support of the business, trade union and academic representatives who make up the Commission.”

However, shadow chancellor Rachel Reeves accused Chancellor Jeremy Hunt of having “picked the pockets” of the entire country by deploying a “raft of stealth taxes” in his Autumn Statement.

Ms Reeves said Mr Hunt was attempting to “take the British people for fools” by seeking to claim the Conservatives are not responsible for the “last 12 years of failure”.

She said: “The Conservatives would have us believe that they are not responsible for the last 12 years of failure. In doing so they take the British people for fools.”

And in a nod to the hit song by The Police, Ms Reeves also told MPs: “It is a familiar tune – every mortgage they raise, every cut they make, every tax they hike, the Conservatives are costing you.”