New NMW and NLW rates coming into force

NMW and NLW increase

As of April 2018, the National Minimum Wage and National Living Wage rates will increase.

The rate rise comes following recommendations from the Low Pay Commission, and are expected to come into force from the first pay period on or after 1 April 2018.

The National Living Wage – which applies to workers aged 25 and above – will go from £7.50 to £7.83 – a 4.4% increase.

The National Minimum Wage rates will increase as follows:

Age bracket Current rate April 2018 rate Percentage increase
21 to 24 year olds £7.05 £7.38 4.68%
18 to 20 year olds £5.60 £5.90 5.36%
16 to 17 year olds £4.05 £4.20 3.70%
Apprentices* £3.50 £3.70 5.71%

*For apprentices who are either under 19 years old, or in their first year of an apprenticeship.

Accommodation offset

The accommodation offset will increase from £6.40 a day to £7.00 a day from 1 April 2018 – an increase of 9.37%.

The future

The government previously had a National Living Wage target of £9.00 an hour by 2020. This has now been modified to ‘60% of median earnings by 2020’. They say next April’s increase to £7.83 will keep them on track for this target.

Furthermore, longer term, the government wants to achieve equality between the apprentice rate and the junior rate, to eradicate financial barriers that discourage people from taking up an apprenticeship.

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