Autumn Statement – changes to National Living Wage in 2023

In November, the new Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn Statement.

It was confirmed that the National Living Wage (NLW), paid to those aged 23 and over, will rise to £10.42 from 1 April 2023. This is an increase of 9.7 % and is the largest ever increase of the NLW rate, representing an annual pay rise worth over £1600 to a full-time worker.

The new rate comes a result of recommendations made by the Low Pay Commission (LPC), with the aim that that the NLW continues on track to reach the Government’s target of two-thirds of median earnings by 2024.

Below are the LPC’s recommendations for NMW rates for the tax year beginning April 2023:

	Rate from April 2023	Current rate (April 2022 to March 2023)	Increase
National Living Wage age 23+ (confirmed)	£10.42	£9.50	9.7%
21-22 Year Old Rate (to be confirmed)	£10.18	£9.18	10.9%
18-20 Year Old Rate (to be confirmed)	£7.49	£6.83	9.7%
16-17 Year Old Rate (to be confirmed)	£5.28	£4.81	9.7%
Apprentice Rate (to be confirmed)	£5.28	£4.81	9.7%
Accommodation Offset (to be confirmed)	£9.10	£8.70	4.6%

Although the increase will be welcomed by the lowest paid employees it may not be enough to alleviate their concerns as costs rise. For suggestions on how employers can support staff who are struggling financially see our recent blog post: How to Support Employees with the Cost of Living Crisis

An increased wage bill could however be a concern for employers who are likewise faced with rising costs. If as an employer you are facing difficult decisions please get in touch to discuss your options and ensure you are following correct procedures.