The Minimum Wage and the pursuit of a Real Living Wage

As an employer it’s very important to understand the different pay levels and you keep up to date with the requirements. Learn where you stand with our detailed guide on the National Minimum Wage.

Following the change in Government, updates to the National Minimum Wage rates and the system to calculate these are likely to be implemented as early as April 2025, with more announced in October 2024.

The Labour Party manifesto stated that the rates will be updated to reflect cost of living and the current banding system, based on age, will also be reviewed.

What is the National Minimum Wage? 

In 1999 the UK introduced its first national minimum wage. Over the years, the minimum wage in the UK has seen revisions to keep pace with inflation and changing economic conditions. The current hourly rates, as of April 2024 of the national minimum wage are: 

Apprentice Under 18 18 to 20 21 and over
£6.40 £6.40 £8.60 £11.44

The rate for employees aged 21 years and over is also known as the National Living Wage. The rate has previously been £10.42 per hour (April 2023-March 2024) and applicable to those aged 23 years and over. The adjustment in April 2024 saw an increase of 9.8%. 

All employers in the UK must use the National Minimum Wage rates as a minimum for all employees. Not paying minimum wage is a criminal offence and authorities will enforce penalties. It is important to rectify any discrepancies as soon as possible. 

Who is entitled to the National Minimum Wage? 

Every employee in the UK is entitled to the National Minimum Wage or National Living Wage. This includes employees on zero hours contracts and casual workers. 

Those on work experience placements, student interns (without promise of future contract of work) and volunteering are not entitled to the National Minimum Wage. 

What is the Real Living Wage? 

The Real Living Wage is determined by the Living Wage Foundation and is based on the UK's cost of living. It is a voluntary benchmark that reflects the actual expenses required for a decent standard of living. It considers factors such as housing, food, transportation, and other essential needs. It's a guideline for employees aged 18 and over. 

The Real Living Wage in the UK is currently £12.00 per hour, and the London Living Wage is £13.15. This is an increase of 10% on the previous rates. 

What do employers need to do? 

Employers need to: 

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Last updated: 7th August 2024