Published On: Tue, Jan 25th, 2022

Minimum wage increase 2022: Key dates you need to know – and how much it rises by | Personal Finance | Finance


The National Minimum Wage (NMW) is the lowest legal rate of pay for UK workers and is enforceable by law. Rates are set to increase in April, following a recommendation by the Low Pay Commission to increase the NMW to £9.50 per hour. An increase in minimum wage will benefit the of millions of low-paid workers – but what else do you need to know about the upcoming change?

What is the National Minimum Wage?

Since 2015, the National Minimum Wage has been known as the National Living Wage.

Having first been set in 1998 under the Labour government, the NMW has acted as a safety net for low-paid workers to access a fair hourly pay-rate.

All UK workers aged between 16-22 are entitled to the rate, though the exact figure varies between each age group.

The lowest minimum rate is currently set at just £4.30 per hour for Apprentices, with the highest rate set at £8.91 for those aged 23 and over (National Living Wage age).

According to gov.uk, the National Living Wage will rise by 6.6 percent, taking the existing £8.91 hourly minimum, to £9.50.

READ MORE: Free prescriptions age changes: Pensioners face ‘difficult choices’

What are the current National Minimum Wage rates?

Since the last increase in April 2021, the UK’s national base-wage rates have remained the same.

According to gov.uk, the current NMW and NLW rates are:

  • National Living Wage – £8.91
  • 21-22 year old rate – £8.36
  • 18-20 year old rate – £6.56
  • 16-17 year old rate – £4.62
  • Apprentice Rate – £4.30
  • Accommodation Offset – £8.36

The 2022 increase will see rates rise at a more rapid rate than those set out in 2021.

From April 1, the National Living Wage will rise by 6.6 percent – 4.4 percent more than the previous increase of just 2.2 percent in April 2021.

The 21-22 year old rate will rise by a whopping 9.8 percent this year, compared to the measly two percent rise last year.

What does the increase mean for your finances?

While the increase may seem like good news for your bank account, the hike in minimum wage comes at the same time as the dreaded National Insurance rate rise.

Millions of workers will pay more National Insurance from April onwards, as part of the Government’s plan to compensate for the costs of social care.

The 1.25 percent hike will force those on a £25,000 annual salary to pay around £193 more a year in National Insurance, while a £50,000 salary will pay around £505 more.

The steep increase is expected to cause significant financial disruption to around 25 million Brits.

April will see a number of other rises across the board, including:

  • Universal Credit, state pension and benefits rise
  • Pension boost for part-time workers
  • Surplus earnings threshold for Universal Credit
  • Council tax rise

Council tax rates increase year on year, though the exact figure depends on where you live.

It is predicted that most council tax bills will rise by an average of £400 per household this year.



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