National Living Wage and National Minimum Wage Rise for April 2018

BlogHR Advice Posted: Tuesday 3rd April 2018 by

On April 1st more than two million UK workers aged over 25 received a pay rise equivalent to £600 per year.

The National Living Wage — the rate paid to workers aged 25 and over — has increased from £7.50 to £7.83 per hour. Tax-free personal allowance has also risen from £11,500 to £11,850.

The National Living Wage was formerly known as the National Minimum Wage but underwent a rebranding exercise in 2016.

National Minimum Wage Rise

However, the National Minimum Wage is still the name given to the minimum rate of pay for apprentices and workers aged 16-24. And, as from the first of this month, more than 400,000 young workers will benefit from the National Minimum Wage rise.

The legal entitlements for both NLW and NMW are now as follows:

Workers aged 25 and over: £7.83 per hour
Workers aged 21 – 24: £7.38 per hour
Workers aged 18 – 20: £5.90 per hour
Workers aged under 18: £4.20 per hour
Apprentice workers: £3.70 per hour

Apprentice Wage Rise

Apprentices are entitled to the apprentice rate if aged under 19, or they are in the first year of their apprenticeship.

If you employ an apprentice aged over 19 and they have completed the first year of their apprenticeship, then you should pay the NMW for their age bracket.

However, there is still a band of workers who do not qualify for either the NLW or the NMW. These include self-employed workers, voluntary workers, and company directors.

The Real Living Wage

Neither rate should be confused with the ‘real living wage’. Established by the Living Wage Foundation charity, the real living wage challenges the national wage rates set by the government.

More than 3000 employers have signed up as members of the Living Wage Foundation and have pledged to recognise the actual cost of living in their wage calculations.

Although not a legal requirement, the real living wage is currently set at £10.20 in London and £8.20 across all other areas of the UK. Real Living Wage rates are calculated every year and employers who are signed up the scheme are committed to honouring any rate increases.

Chancellor Philip Hammond continues to stand by the pledge that a Conservative government will deliver an hourly National Living Wage rate of £9 by 2020.

We’d love to hear your views on the National Living Wage, National Minimum Wage, and Real Living Wage. Head on over to our Facebook page to comment.

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