The National Living Wage is £7.50 per hour from 1 April 2017. The National Minimum Wage ranges from £3.50-£7.05 per hour, depending on age and whether or not the person employed is an apprentice.
Wage rates are set in April each year.
National Living Wage
Announced in the 2015 Budget, the National Living Wage applies to everyone aged 25 and above who isn’t in the first year of an apprenticeship.
If you are 25 and above and are in the first year of an apprenticeship, the Living Wage does not apply – instead, the minimum you can be paid is £3.50 per hour, as per the National Minimum Wage.
At the time of the National Living Wage’s announcement, the UK Government set a target for it to reach around £9 per hour by 2020. However, the actual rate of National Living Wage increases is determined by the independent Low Pay Commission, who take into account inflation and feedback from employers.
The National Living Wage came into force on 1 April 2016.
National Minimum Wage
The precursor to National Living Wage, the Minimum Wage now only applies to people in employment who are aged 16-24 or are first-year apprentices. The rates are:
|Age||Minimum Wage, per hour|
*The apprentice rate applies to all apprentices aged 16-18, and apprentices aged 19 and above who are in the first year of their apprenticeship. From their second year, apprentices aged 19 and above must be paid the Minimum or Living Wage applicable to their age.
The non-compulsory living wage
Long before the National Living Wage was announced, there was a campaign for a ‘Living Wage’ conducted by the Living Wage Foundation. It’s important to be clear about the distinction, because one is compulsory and the other is voluntary.
The Living Wage Foundation’s campaign suggests employers voluntarily pay their employees a minimum of £8.45 per hour outside of London, and £9.75 per hour inside London.
Not everyone is entitled to the National Living Wage or the National Minimum Wage. Exemptions apply to (among others):
- Self-employed people
- Those on work experience
- Members of the armed forces
- Family members who are also employees and live in the employer’s home.
For the full list of exemptions, read the Government’s guidance.