From April 2024, both the National Minimum Wage (NMW) and National Living Wage (NLW) will increase. Not only this, but the higher rate will also now apply to 21 and 22-year-olds for the first time.
Prepare For The Biggest Ever Increase In NLW & NMW
The Government has estimated that over 2 million taxpayers currently eligible for the NLW will benefit from this increase. But what are the new rates, and what does this mean for employees? Learn more in our article below:
- What’s The Difference Between NMW & NLW?
- How Will NMW & NLW Change In 2024?
- What Are The New Rates For April 2024?
- How Will The New Rates Benefit Full-Time Workers?
What’s The Difference Between NMW & NLW?
The National Minimum Wage (NMW) and National Living Wage (NLW) are designed to provide employers with a base rate for hourly pay. This rate differs depending on the employee’s age and whether they’re an apprentice. The differences between the two are as follows:
- National Minimum Wage: This is the minimum amount an employee can be paid and applies to those under the age of 23, regardless of their position within the company.
- National Living Wage: This is the minimum amount that employees over the age of 23 can legally be paid. It is set by the Government and amended each year.
How Will NMW & NLW Change In 2024?
The National Living Wage currently applies to employees aged 23 and over and stands at £10.42 per hour. As mentioned above, employees under 23 and apprentices are then entitled to the National Minimum Wage. However, from the 1st of April 2024, the age at which employees qualify for the NLW will be lowered from 23 to 21. This is the second time it has been lowered, as in April 2021, the age was reduced from 25 to 23.
Along with the change in age, both the NLW and NMW will also be increased. The NLW will rise by £1.02 to £11.44 per hour, and the NMW will increase by more than £1 per hour.
What Are The New Rates For April 2024?
The NLW and NMW rates effective from the 1st of April 2024 are as shown below:
| Age | Rate per hour | Increase (£) | Increase (%) |
|---|---|---|---|
| 21+ (NLW) | £11.44 | £1.02 | 9.8% |
| 18-20 (NMW) | £8.60 | £1.11 | 14.8% |
| 16-17 (NMW) | £6.40 | £1.12 | 21.2% |
| Apprentice | £6.40 | £1.12 | 21.2% |
How Will The New Rates Benefit Full-Time Workers?
This is the largest-ever rise in statutory hourly minimum rates and has been forecasted to result in an increase in annual earnings worth over £1,000 for those working under full-time contracts.
Since being introduced in April 2015, these consecutive increases to the legal minimum hourly rate have meant that full-time employees on the NMW in 2024 will be more than £9,000 better off than they would have been in 2010.
Need Advice? Contact Our Team Today
If you’re a business owner and need guidance with amending any of your employee’s hourly rates or salaries, please do not hesitate to contact us. Our experienced accounting team can ensure that your pay rates stay within Government guidelines.