Millions of workers will benefit from a pay rise worth more than £1,000 per year from today.
The new National Living Wage and National Minimum Wage rates have come into effect.
The age threshold at which point a person qualifies for the National Living Wage has also been reduced.
It means those aged 21 and 22 will now be better off, as they previously didn’t qualify for the highest possible minimum wage rate.
The National Living Wage is now £11.44 per hour for people aged 21 or older, having previously been £10.42 for those at least 23 years old and £10.18 for 21 to 22-year-olds.
The National Minimum Wage for 18 to 20-year-olds will now get £8.60 per hour, up from £7.49.
National Living Wage age changes have come into effect
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Under 18s and apprentices (aged under 19 or at least 19 and in the first year of their apprenticeship) can now get £6.40 per hour, up from £5.28.
The Government said the pay rise means the annual earnings of a full-time worker on the National Living Wage would increase by more than £1,000 next year.
More than two million workers on low pay are set to benefit from the increase to the National Living Wage.
Despite the pay rise, low income households are at risk of being dragged into paying tax, due to the ongoing six-year freeze to income tax thresholds.
The level at which point a person has to pay tax will remain at £12,570 until 2028.
The almost 10 per cent rise in the UK minimum wage will be another obstacle for policymakers attempting to bring inflation down to target levels, some economists have warned.
The potential for stickier inflation could lead to a longer wait before the Bank of England cuts interest rates, they warned.
Inflation peaked at 11.1 per cent in 2022 before gradually easing over the past year, most recently to 3.4 per cent.
Ashley Webb, UK economist at consultancy Capital Economics said: “The fear is that the rise this year will contribute to stickier wage growth and inflation.”
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The National Living Wage is the national minimum wage rate for over 21s, and should not be confused with the real Living Wage.
The real Living Wage is a voluntary UK wage rate based on living costs.
The Living Wage rate for 2023/24 is £12 per hour.
For those based in London, the rate is £13.15.
