Most adult workers in the UK must be paid a minimum wage by law, regardless of the size of the business. The National Minimum Wage (NMW) was first introduced on 1 April 1999 by the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 1999. The UK’s minimum wage has steadily increased in recent years at an annual rate of between 20 to 30 pence per hour in the last 20 years. The UK has a relatively high minimum wage compared to other countries, according to Eurostat data. In 2019, the UK had the seventh-highest adult minimum wage out of 22 countries the data analysed. The country with the highest wages was found to be Luxembourg, followed by the Netherlands, Belgium, Germany, France and Ireland. This NMW guide was updated by HR Solutions on 18th December 2020.
Guide to the National Minimum Wage
The UK could have one of the highest national minimum wages in the world if the ambitious plans set out by both the current government and the Labour Party become a reality. Twenty years since it was first introduced, the National Minimum Wage (NMW) has seen the wages of the lowest paid in the country grow faster than other workers.
National Minimum Wage 2021 and Other Rate Increases
The National Minimum Wage rates that apply for pay periods on or after 1 April 2021 are as follows:
- National Living Wage (for adults aged 23 or over): £8.91 per hour
- Adult rate for workers aged 21 to 23 (except where the apprenticeship rate applies): £8.36
- Development rate, for workers aged between 18 and 20 inclusive (except where the apprenticeship rate applies): £6.56
- Young workers rate, for workers aged under 18 but above the compulsory school age and who are not apprentices: £4.62
- Apprenticeship rate, for apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship: £4.30
- Daily rate of the accommodation off-set: £8.36 per day.
National Minimum Wage 2020 and Other Rate Increases
- The government has confirmed it will raise the National Insurance threshold to £9,500 in 2020.
- The National Living Wage has been increased by 6.2%, effective from 1st April 2020. The new National Minimum Wage increase will also take effect from from 1st April 2020.
- Increases in the following statutory pay rates have been proposed: Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), Statutory Paternity Pay, Statutory Adoption Pay and Shared Parental Pay. These statutory pay rate increases are usually effective from 6th April 2020.
Real Living Wage and National Living Wage
According to the Living Wage Foundation, over 250,000 people will see wages boosted by 20p to £9.50 if their employer has signed up to the ‘Real Living Wage‘, and employees should receive the new rate in May 2021. Not to be confused with the National Living Wage (NLW), the Real Living Wage is a recommendation of the Living Wage Foundation that ensure all workers earn a wage that covers the true cost of living.
HR Risk and Compliance Audit (FREE)
As part of our service HR Solutions offer you the free, online Risk and Compliance Audit which will take about 15 minutes to complete. One of our HR Consultants will then review your answers and provide you with a bespoke report for your organisation. The report will include signposting you to what additional action you might need to consider taking to be confident of meeting your legal requirements as an employer.
Webinar Recordings – Watch on Demand
HR Solutions have several free helpful webinar recordings that discuss pay, recruitment and employment related issues including:
National Minimum Wage – Avoiding the Pitfalls
Job References and GDPR – Pitfalls and Quick Tips
The Future for Workers (Status and Rights)
Brexit HR and Employment Law
Pension Auto Enrolment
Need HR Advice?
Find out how our HR services could benefit your business, by completing the contact form below.
One of our team will call you to discuss some options and pricing with you.