From Monday, millions of low paid people will be getting a pay rise.
While the Pension Industry whinges about not getting 12% of salary mandated pension contributions , it should remember that the pots of those who have been auto-enrolled on the minimum wage will now be growing a lot faster.
Coincidental to this increase (and I don’t see this as a coincidence), next week is also the first that low-earners in net pay pension schemes will become entitled to a rebate of pension contributions if they are paying contributions while below the income tax threshold.
While the rebate will not be paid till the summer of 2025 and will only be paid on production of bank details (amber flag), a Government promise of payment is a gilt-edged promise.
Pension providers, especially those like NOW, People’s and NEST who are mostly dependent on minimum contribution payments, have reason to be grateful both for the switch to national living wage and to the solution provided by HMRC to the net-pay “anomaly”. Together they are making pension saving more affordable to low-earners. The opt-out remains for those who cannot afford to pay or do not choose to pay, but the low opt-out rates that have continued through the recent squeeze on incomes, shows just how much low-earners want to be saving.
More people will be saving and saving more – with the national living wage. Now it is up to us, to make sure people’s savings work as hard as they do
National Minimum Wage and National Living Wage rates
The hourly rate for the minimum wage depends on your age and whether you’re an apprentice.
You must be at least:
- school leaving age to get the National Minimum Wage
- aged 23 to get the National Living Wage – the minimum wage will still apply for workers aged 22 and under
From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage.
Current rates
These rates are for the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school leaving age). The rates change on 1 April every year.
| 23 and over | 21 to 22 | 18 to 20 | Under 18 | Apprentice | |
|---|---|---|---|---|---|
| April 2023 (current rate) | £10.42 | £10.18 | £7.49 | £5.28 | £5.28 |
From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage.
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
|---|---|---|---|---|
| April 2024 | £11.44 | £8.60 | £6.40 | £6.40 |
Apprentices
Apprentices are entitled to the apprentice rate if they’re either:
- aged under 19
- aged 19 or over and in the first year of their apprenticeship
Example
An apprentice aged 21 in the first year of their apprenticeship is entitled to a minimum hourly rate of £5.28.
Apprentices are entitled to the minimum wage for their age if they both:
- are aged 19 or over
- have completed the first year of their apprenticeship
Example
An apprentice aged 21 who has completed the first year of their apprenticeship is entitled to a minimum hourly rate of £10.18.
Previous rates
The following rates were for the National Living Wage and the National Minimum Wage from April 2017.
Rates from 1 April 2021
| 23 and over | 21 to 22 | 18 to 20 | Under 18 | Apprentice | |
|---|---|---|---|---|---|
| April 2022 to March 2023 | £9.50 | £9.18 | £6.83 | £4.81 | £4.81 |
| April 2021 to March 2022 | £8.91 | £8.36 | £6.56 | £4.62 | £4.30 |
Rates before 1 April 2021
Before 1 April 2021 the National Living Wage was for those aged 25 and over.
| 25 and over | 21 to 24 | 18 to 20 | Under 18 | Apprentice | |
|---|---|---|---|---|---|
| April 2020 to March 2021 | £8.72 | £8.20 | £6.45 | £4.55 | £4.15 |
| April 2019 to March 2020 | £8.21 | £7.70 | £6.15 | £4.35 | £3.90 |
| April 2018 to March 2019 | £7.83 | £7.38 | £5.90 | £4.20 | £3.70 |
| April 2017 to March 2018 | £7.50 | £7.05 | £5.60 | £4.05 | £3.50 |
Who gets the minimum wage
Read the information on who is entitled to the minimum wage.
You can use the minimum wage calculator to check whether the National Minimum Wage or National Living Wage is being paid.
Contact Acas if you’re not getting the National Minimum Wage and think you should be.
