The National Minimum Wage refers to the age-graded minimum hourly rate of pay that employers must provide to workers. The rates are set by the government, and were most recently updated in the 2021 Autumn Budget, when the Chancellor accepted recommendations from the independent Low Pay Commission. The changes are effective from April 2022, the current rates being as follows:
|23 and over
||21 to 22
||18 to 20
The National Living Wage was introduced in April 2016 as a new minimum wage for those aged over 25. More recently, the government has announced its ambition for the NLW apply to all those over 21, and for it to eventually reach two-thirds of median earnings by 2024.
Currently, however the National Living Wage refers solely to the '23 and over' part of the National Minimum Wage. When the Prime Minister refers to the Chancellor raising the living wage, he refers to its rise in the Autumn Budget from £8.91 to £9.50, an increase of 6.6%. Government does control it, and employers do have to honour it.
The Joseph Rowntree Foundation has also maintained its own 'living wage' figure since June 2015. It explains on its website:
The real Living Wage is an independently calculated rate of pay that
is based on the actual cost of living in the UK and London and applies
to all workers over 18. Over 5,000 employers in the UK are choosing to
pay these voluntary hourly rates to all their staff. At the heart of
the Living Wage movement is a simple idea - that a hard day’s work
deserves a fair day’s pay.
In 2016, the government introduced a rise
in the minimum wage for the over 25’s, which was called the ‘National
Living Wage’. However, this is not based on the real cost of living
and is why the real Living Wage is higher than the minimum wage and
the National Living Wage.