The Chancellor has announced a rise in the National Living Wage (NLW) to over £11 an hour from April 2024, up from £10.42 an hour for the current financial year 2023/2024.
The rise takes the NLW to two-thirds of average earnings and would mean the annual earnings of a full-time worker on the National Living Wage will increase by over £1,000 next year.
The National Living Wage was introduced in the UK in 2016 for workers aged 25 or over. In April 2021, the NLW was extended to apply to workers aged 23 and over.
The level of pay is reviewed and increased each year on 1 April in line with recommendations from the Low Pay Commission (LPC).
Having met the initial target of reaching 60% of national median earnings by 2020, the government set a new target of two-thirds of median earnings by 2024.
According to the Chancellor’s statement from 2 October 2023, a full-time worker on the National Living Wage will be over £9,000 better off than they would have been in 2010 as a result of successive rises.
In preparation for the change in rate from April 2024, employers are advised to ensure their payroll is revised accordingly for all workers covered by the NLW.