The minimum wage is rising amid growing inflation (Picture: Getty)
Rishi Sunak has confirmed that the national living wage will rise to £9.50 in April.
The Chancellor’s widely-expected move means that the minimum wage for all those aged 23 and over will rise by 6.6%.
The new rate – announced in Wednesday’s Autumn Budget after being recommended by the Low Pay Commission – marks the third biggest hike since the 2008 financial crisis.
For someone working 35 hours a week on the new salary, the increase from the previous rate of £8.91 an hour is worth just over £1,070 a year in earnings before tax – around £90 a month.
The minimum wage is expected to increase to £8.36 for those aged 21 and 22, and £6.56 for 18 to 20-year-olds.
Under 18s are expected to be given a minimum hourly rate of £4.62 and apprentices £4.30.
But the earnings boost may not be as significant as some would hope, amid a cost of living crisis and soaring prices in the UK.
Mr Sunak admitted this afternoon that inflation in September was 3.1 % and admitted it ‘is likely to rise further’ due to pressures caused by supply chains and energy prices.
The new minimum wage will match what the Living Wage Foundation said is necessary to live comfortably in the UK – with the Government’s ‘National Living Wage’ rate normally lagging significantly behind what the group says is needed.
It also believes the rate should be £10.85 per hour in London.
Labour Shadow Chancellor Rachel Reeves welcomed the increase in the minimum wage but said the Government needed to go ‘further and faster’ and should have moved to a rise of at least £10 an hour.
The director of the Institute for Fiscal Studies (IFS), Paul Johnson contested the Chancellor’s claim the minimum wage increase is worth £1,000 to a full-time worker, stating this is worth £700 after tax and national insurance and ‘less than £300 to anyone on Universal Credit (UC)’.
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