MILLIONS of workers could get a bigger pay rise than previously announced.
The National Living Wage could rise next year to well above what the government has announced, according to a new report.
It means that full-time workers over 23 could see their annual earnings rise above £1,000 next year.
The Resolution Foundation said stronger than expected wage growth means the figure could increase to around £11.46 an hour next April, well above the £11 suggested by the Chancellor recently.
The think tank said the national living wage is currently pegged to median hourly pay.
But strong wage growth in recent months – average weekly earnings grew by 7.8% in the three months to August – should increase its cash value next April.
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The foundation's calculation implies the statutory rate will rise to £11.46 an hour next year, up from the current £10.42.
This would be a 10% increase in cash terms, the third largest percentage cash increase in the minimum wage during its 26-year history.
Nye Cominetti, senior economist at the Resolution Foundation, said: "The Chancellor has announced that the national living wage would rise to at least £11 an hour next April.
"This looks to be a rare case of a politician underpromising, as the actual rate is more likely to be around £11.46.
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"This would be a huge pay increase that will help millions of low earners as they navigate the cost-of-living crisis."
The exact amount that the minimum wage will be confirmed at a later date.
Those under the age of 23 are paid the National Minimum Wage.
What are the National Minimum Wage rates?
The National Minimum Wage is the amount workers under 23 (but of school-leaving age) are entitled to.
Exactly what you'll get depends on how old you are.
Here are the rates for 2023/24:
- Those aged 21-22 get at least £10.18 an hour
- For 18 to 20-year-olds, the minimum wage is £7.49 an hour
- Under-18s are entitled to a minimum of £5.28 an hour
- The apprenticeship wage is also £5.28 an hour
Who gets the National Minimum Wage and am I entitled?
To qualify for the National Minimum Wage, you have to be of school-leaving age, which is usually above 16.
You are eligible to receive the pay rate if you work full-time, part-time or as a casual labourer – for example, someone hired for one day.
You are also entitled to the National Minimum Wage if you are an agency worker or someone paid by the number of items you make.
Apprentices also qualify for a National Minimum Wage, as well as trainees and staff still in their probationary period.
The rates also apply to disabled workers.
Anyone who thinks they are not getting paid fairly should raise the issue with their employer in the first instance.
If this is not effective, the next step is to file a complaint on the government's website.
Employers who do not pay the minimum wage can be publicly "named and shamed".
Those who blatantly fail to comply are also at risk of facing criminal prosecution.
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Those who are self-employed, voluntary workers, company directors, and family members who live in the home of the employer and do household chores do not qualify for the minimum wage.
Au pairs, members of the armed forces, and people on a government employment programme are also not entitled to the payment.
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