To smooth this transition and avoid a very large increase once they become eligible, we recommended a 10.9 per cent increase for this group, taking their minimum wage to £10.18 in 2023. The evidence continues to support the decision to bring 23 and 24 year olds into the NLW and the Commission’s view remains that 21-22 year olds should also be brought into the NLW by 2024. With this in mind, we undertook to consider if there is a need for a separate Apprentice Rate long term, with a forthcoming Apprenticeship Evaluation Survey offering the level of evidence necessary to see if a separate rate for apprentices is still justified. We continued to support this position as we saw no evidence of negative effects stemming from this change. In our 2021 Report we recommended aligning the Apprentice Rate and the 16-17 Year Old Rate. Because of this labour market strength for 16-17 and 18-20 year olds we recommended increases of 9.7 per cent – in line with the increase in the NLW – for both of these groups, to £5.28 and £7.49 respectively. This tight labour market also improved pay for these workers earnings increased substantially, particularly for those aged under 21. At the point of our recommendations their employment rates were close to pre-pandemic levels, aided by the tight labour market and strong demand for labour in youth-friendly sectors. But their employment recovered rapidly throughout 20. Younger workers – those aged under 23 – were the most likely to lose employment during the pandemic. Under these conditions, we judged it appropriate to have a higher increase in April 2023 than in 2024. The consensus among forecasters at this time was for GDP growth to slow and for the labour market to soften over the course of 2023. While the economy had slowed in the lead-up to our advice, the labour market remained very strong. We judged this balance, with a higher increase in 2023 than 2024, to be appropriate given the prevailing economic conditions. To achieve the two-thirds target, our recommendation implied a smaller NLW increase in 2024, when average wage growth was expected to have slowed (see next page for details). This was the on-course rate consistent with achieving the Government’s target of two-thirds of median earnings by 2024. In October, we recommended the NLW should increase by 9.7 per cent (92 pence) in April 2023 to £10.42. For more detail see the accompanying main report and its summary. ![]() Our recommendations in October were based on the best evidence available at that point. The NLW and NMW rates effective from 1 April 2023 are shown below. We call our projected 2024 rate the ‘on-course’ rate.Īll sources and references for charts and data can be found at the end of the report.įor the evidence base behind our recommendations for 2023 see our full report. This report looks at what the new rates will mean, the LPC’s work for 2023 and our current projection of the level of the NLW needed to reach the Government’s target of two-thirds of median earnings in October 2024. We met in October 2022 to agree recommendations for the new rates of the National Minimum Wage (NMW), including the National Living Wage (NLW), that come into force on 1 April 2023. ![]() Every year since 1998, Commissioners have unanimously agreed on the LPC’s recommendations to the Government. We are a social partnership body, made up of nine Commissioners representing employers, workers and independent experts. ![]() The Low Pay Commission (LPC) is an independent public body that advises the Government on the rates of the National Minimum Wage (NMW), including the National Living Wage (NLW).
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