Published On: Sun, Aug 9th, 2020

Minimum wage UK: How much should you be earning? | Personal Finance | Finance

The National Minimum Wage (NMW) is the minimum pay per hour that most workers in the UK are entitled to receive by law. The rate varies depending on a person’s age and whether or not they are an apprentice. Most workers who are 25 or older must be paid at least the National Living Wage (NLW), which is the highest rate of the National Minimum Wage. The first NMW was established by the Labour government in 1998. Before that, no official rate existed – although trade unions fought hard for their members.

How much should you be earning?

To qualify for the National Minimum Wage, you must be at least school leaving age, which is the last Friday in June of the school year in which you turn 16.

Almost all workers are entitled to the NMW, including casual, part-time and temporary workers.

However, if you are self employed or a company directer, you are not entitled to receive the NMW.

As of Spring 2020, the legally binding NMW rates are:

25 and over: £8.72
21-24: £8.20
18-20: £6.45
Under 18: £4.55
Apprentice: £4.15

READ MORE: Kickstart Scheme pay rates unveiled – how much employees will get

When did the National Minimum Wage increase?

Chancellor Rishi Sunak confirmed in his spring Budget, delivered on Wednesday, March 11, 2020 he would increase the UK NMW on April 1, 2020 – giving a pay rise to more than two million workers.

Additionally, former Chancellor Sajid Javid also announced there would be an increase in the NMW from £8.21 to £8.72 an hour.

The 6.2 percent rise comes at double the rate of average annual wage growth and also twice the current rate of inflation.

Since this change has come into effect it has been the biggest cash rise for NMW since it was first established in the 1990s.

What if I’m making less than the NMW?

If you think you have been paid less than the correct minimum wage for your age, your best bet is to talk directly to your employer.

If this does not solve the problem, you can ask to see your payment records and make copies of them.

You can also make a complaint directly to HMRC about your employer’s actions.

If HMRC find out that you have been incorrectly paid, your employer must pay you anything they owe you as well as a fine to HMRC for paying below the NMW.

Who doesn’t qualify for the NMW?

Those who are self employed, voluntary workers, company directors and family members who live in their employer’s home and do household chores do not qualify for the rate either.

There is no difference in pay between people who live in London and those who live elsewhere.

Additionally, members of the armed forced, workers younger than school leaving age, people shadowing others at work, prisoners, fishermen and people living and working in a religious community are not entitled to receive the NMW.

Workers already employed before October 1, 2013, are entitled to the pay set under their contract of employment.

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