As part of the recent Budget, the Chancellor announced an increase in the National Minimum Wage across the board. Everybody on the minimum wage will now earn between 20p and 40p per hour more – this puts the lowest possible level at £3.90p/h (Apprentices) and the highest at £8.21 (Employees 24+). The average minimum-wage worker is now on a salary of around £17,000 – enough to also benefit from the increase in Personal Allowance to £12,500 that was also announced in the budget. The change also notably marks the first time the minimum wage has broken £8p/h.
But is it enough to live on? Whilst the increase closes the gap, the maximum minimum wage is still shorter than the UK Living Wage that companies are encouraged to pay – this sits at £8.75p/h. It’s also significantly lower than the London Living Wage of £10.20p/h. So, there’s still a serious argument to be made that despite the increase, it won’t be enough for many people to support themselves on solely. But this doesn’t mean we aren’t making progress – the minimum wage has been steadily rising for the last few years in a way that looks to be more than just a response to inflation. Whilst that isn’t a solution for those on the minimum wage currently, it means that in future we may have a minimum wage that allows people to provide for themselves!
If you’d like to read the full Budget, you can find it here. If you have any questions about wages and income tax, or anything else in the Budget, just get in touch with your local AIMS Accountant!