- Minimum wage to rise from £10.42 to £11.44 an hour from April 2024
- It’s a pay rise of £1,856 a year for someone working full time on the minimum wage
- The government estimates 2.7 million workers will benefit from the increase
Laura Suter, head of personal finance at AJ Bell, comments on the increase to the minimum wage:
“The minimum wage will rise by more than £1 an hour from April – a significant increase for the lowest earners in the UK. The government had already confirmed it planned to increase the minimum wage to at least £11 an hour, but this larger-than-expected rise will be a big boost to many people’s earnings. It’s a pay rise of £1,856 a year for someone working full time on the minimum wage and will take their annual salary to £20,820 a year*. This increase comes off the back of a near-10% increase last year and means that over the space of two years the minimum wage will rise by almost £2 an hour, having been at £9.50 as recently as April 2022.
“Younger earners will benefit even more, as those aged 21 and over will now be eligible for the full rate of minimum wage – where currently they get a reduced rate until they reach the age of 23. It means that a 21-year-old will see the minimum wage rise from £10.18 now to £11.44 from April.
“The timing of the announcement is presumably so chancellor Jeremy Hunt can wake up to some glowing headlines about rising wages for the lowest earners on the morning of Autumn Statement day. The move fits with the government’s agenda of making work pay and encouraging more people into work, in a bid to solve the UK’s productivity conundrum.
“Once again the government hasn’t been shy about releasing big changes ahead of the actual statement to the house – a move that will put the chancellor in the bad books with the speaker. Another person who may not be overjoyed at this news is the governor of the Bank of England, Andrew Bailey, who reiterated today that the fight to get inflation back to 2% isn’t over. Putting more money in people’s back pockets risks being inflationary as they have more money to go out and spend. However, the government is clearly confident this is not a substantial risk.
“The move to increase the minimum wage puts more of a cost burden on businesses – while the government sets the rate, it’s businesses around the country that actually pay it. This sizeable increase might be the strongest hint yet that some tax breaks for businesses are due to be announced in the Autumn Statement – to help balance the increased costs from these rising wages.”
*Based on a 35-hour week.
