Uk Minimum wage increase in 2022: What is the new UK National Living Wage and how much is it going up today? With the energy cap increase set to take effect in 2022, questions remain about whether the hike will be enough to help families facing a cost-of-living crisis.
The National Minimum Wage has been raised for all workers in the United Kingdom.
The reform was announced in the 2021 Budget by Rishi Sunak, and it will take effect at the same time as the energy price cap rises and households receive a council tax refund to help with rising costs.
However, with the energy cap increase scheduled to take effect this month, doubts linger about whether the increase will be enough to help families suffering a cost-of-living problem.
What does the new minimum wage look like?
According to the Department for Business, Energy and Industrial Strategy, the National Minimum Wage and National Living Wage will increase, affecting around 2.5 million UK workers.
The National Living Wage will rise to £9.50 per hour on April 1, 2022, as announced in the 2021 Budget, equating to an extra £1,000 per year for a full-time worker.
“This is a government that is on the side of working people,” Mr Sunak stated at the time. This wage increase assures that labor pays and that we remain on track to accomplish our goal of ending low pay by the conclusion of this Parliament.
The whole range of increases is as follows:
- National Living Wage (NLW) – new rate: £9.50, up 6.6%
- Rate for 21-22 year olds — new rate: £9.18, an increase of 9.8%
- Rate for 18-20 year olds — new rate: £6.83, up 4.1 percent
- Rate for 16-17 year olds — new rate: £4.81, up 4.1 percent
- Apprentice rate The new rate of £4.81, an 11.9 percent rise
- Offset accommodation – new rate: £8.70, up 4.1 per cent
Workers are encouraged to visit checkyourpay.campaign.gov.uk on Friday to see if they’re being paid correctly and to seek guidance if they aren’t. The Low Pay Commission, an independent advisory council, made these suggestions, which were accepted by the government and ratified on October 25, 2021.
How has the public reacted?
The raises were welcomed by Bryan Sanderson, Chair of the Low Pay Commission (LPC).
“The Business Secretary’s strong support is especially welcome at this difficult time,” he said. “Minimum wage workers look after our elderly and sick, harvest and deliver our food, and perform a variety of other tasks that benefit us all.”
As important members of our society, they all deserve to be fairly compensated and valued.”
While greater earnings are good, they are unlikely to make a significant difference in the current cost of living crisis.The price cap will climb from £1,277 to £1,971 on Friday, April 1st, causing energy prices to skyrocket.Costs of groceries, national insurance contributions, and VAT on food and beverages are all expected to rise at the same time, putting consumers in a financial bind.
“According to the Trades Union Congress, energy bills are set to rise at least 14 times faster than wages this year, more than canceling out the boost of the minimum wage hike and, as a result, leaving households financially vulnerable,” Jamie Mackenzie, director of employee benefits firm Sodexo Engage, said.”As a result, the minimum wage rise may not be adequate to protect all employees from rising prices, and companies m toust do all they can to relieve employees’ financial strains.”
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“According to our research, employees may save over £1,600 in benefits alone, demonstrating that grocery discounts, online cashbacks, and e-vouchers can go a long way in assisting a workforce that is feeling the pinch.”
Bridget Phillipson, the Shadow Chief Secretary to the Treasury, said the rise was an “underwhelming offer”.
“Much of it will be gobbled up by the Government’s tax hikes, Universal Credit cuts, and failure to control energy rates,” warned the Labour MP.”Labour is clearly the only party committed about improving working people’s chances.”
What Does a Real Living Wage Look Like?
There is also an unofficial and voluntary “true living wage” in addition to the National Living Wage.
The Living Wage Foundation, a campaigning organization, calculates this based on current living costs.
According to the foundation, the “actual” living wage in the UK is currently £9.90 per hour, with £11.05 in London, nearly a pound higher than the National Living Wage.