The current target is for the NLW to reach 67% of median earnings by 2024, by which time it will also have been extended to cover all workers aged 21 and over (down from 25 at the launch of the NLW in 2016 and 23 as of last year). This target has remained in place despite the difficult conditions many, though not all, lower-paying employers have faced over the last two years. The latest central estimate from the Low Pay Commission (LPC), which advises the Government on the level of the statutory minimum, is for the NLW to reach £10.32 in 2023 and £10.95 in 2024 (all workers aged 21+) – increases of 8.6% and 6.1% respectively.
The LPC is currently deliberating over its recommendation for next year’s increase, informed by evidence including key economic indicators (not least inflation), commissioned research (including a survey and follow-up case studies undertaken by IDR) and consultation feedback. The new statutory floor should be announced before Christmas. Meanwhile the voluntary real Living Wage rose last month from £9.90 to £10.90 an hour outside London and from £11.05 to £11.95 in the capital, two months ahead of the usual uprating date in response to the steep rise in the cost of living. Accredited employers have been urged to implement the new rate as soon as possible but have until 14 May 2023 to pay the new rates to their workers.
