Autumn Budget 2021 - NLW and NMW rates 2022-2023 confirmed
27 October 2021
Changes from 1 April 2022
The Government accepted the Low Pay Commission’s (LPC) recommendations for 2021-22 in full. The rates that apply to pay reference periods beginning on or after 1 April 2022 are shown in this table.
|
|
Current |
From April 2022 |
Increase |
|
NLW 23 years+ |
£8.91 |
£9.50 |
6.6% |
|
21-22 year old rate |
£8.36 |
£9.18 |
9.8% |
|
18-20 year old rate |
£6.56 |
£6.83 |
4.1% |
|
16-17 year old rate |
£4.62 |
£4.81 |
4.1% |
|
Apprentice rate |
£4.30 |
£4.81 |
11.9% |
|
Accommodation offset |
£8.36 |
£8.70 |
4.1% |
Note that, from April 2022, the Apprentice rate will be aligned in value with the 16-17 year old rate. This follows a recommendation from the LPC that the Government accepted last year. Also, after achieving the LPC’s previous ambition of aligning the accommodation offset with the 21-22 year old rate, next April it will increase in line with other age rates.
Future changes
In 2019, the LPC recommended that the NLW should begin at a younger age, reducing it from 25 to 21 years old in two stages. The Government accepted this and reduced the NLW starting age to 23 from April 2021. It is expected to reduce to 21 years old by 2024.
The Chancellor confirmed the Government’s continued commitment to a National Living Wage target of two-thirds of median earnings by April 2024, subject to economic conditions. This remains the LPC’s recommendation; in its March 2021 report, it forecast £10.33 for April 2024, although with a high degree of uncertainty due to the effects of the coronavirus lockdowns and the Coronavirus Job Retention Scheme on the previous year’s pay data.
The Government had asked the LPC to review the exemption from minimum wage entitlement for live-in domestic workers. This exemption was introduced to support the employment of au pairs, but without adequately defining this role. As a result, LPC’s research found that the exemption is now mainly used as a loophole for migrant workers in domestic settings without any element of cultural exchange. In addition, the exemption is potentially discriminatory because it is more likely to affect women than men. So, the LPC has recommended that this exemption be withdrawn and, if necessary, be replaced by a clearly defined visa route for au pairs.
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