Most workers in the UK must be paid a minimum wage by law, regardless of the size of the business. This is known as the National Minimum Wage (NMW). There are different bandings for the minimum amount to be paid per hour, which generally relate to the age of the worker. Typically, these rates increase each year in April and occasionally the age bands also change. The NMW was first introduced in the UK on 1 April 1999 by the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 1999. In April 2016 a new top band of the NMW was introduced and this became known as the National Living Wage.
The UK’s minimum wage has steadily increased over the last 20 years, typically at an annual rate of between 20 to 30 pence per hour. However, in October 2021, substantial increases of up to 11% were made to the bandings and the National Living Wage and the next highest band were increased by 59 and 82 pence per hour respectively. The UK has a relatively high minimum wage compared to other countries. In 2020, it had the seventh-highest minimum wage according to World Population Review. The country with the highest wages was found to be Australia, followed by Luxembourg, New Zealand, Monaco, Ireland and France.
This NMW guide was updated by HR Solutions in July 2022.
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 2022 and Other Rate Increases
The National Minimum Wage rates that apply for pay periods on or after 1 April 2022 are as follows:
- National Living Wage (for adults aged 23 or over): £9.50 per hour
- Adult rate for workers aged 21 to 22 (except where the apprenticeship rate applies): £9.18
- Development rate, for workers aged between 18 and 20 inclusive (except where the apprenticeship rate applies): £6.83
- Young workers rate, for workers aged under 18 but above the compulsory school age and who are not apprentices: £4.81
- Apprenticeship rate, for apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship: £4.81
National Minimum Wage 2021 and Other Rate Increases
The National Minimum Wage rates that apply for pay periods between 1 April 2021 and 1 April 2022 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.
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.