Minimum wage increase 2022: Everything you need to know

Minimum wages are expected to increase later this year bringing in changes to the wage rate for 16-year-olds and up. Here’s everything you need to know about the transition.

Minimum wage increase 2022: everything that you need to know
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Minimum wage increase 2022: everything that you need to know

The National Minimum Wage (NMW) is the legal minimum wage for workers in the United Kingdom. This wage is available to all UK workers aged 16 to 22, albeit the specific amount varies by age group. Following the Low Pay Commission's suggestion to raise the National Minimum Wage to £9.50 per hour, rates are likely to rise in April.

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Apprentices currently earn the lowest minimum wage of £4.30 per hour, while individuals aged 23 and above make the highest wages of £8.91 per hour. According to, the National Living Wage will increase by 6.6%, from £8.91 to £9.50 per hour. Millions of low-income workers will benefit from a hike in the minimum wage, but what else do you need to know about the impending change?

Date of change

The new National Living Wage rate will come into effect five days before the start of the new tax year, i.e., from April 1, 2022. This will allow workers to benefit from the offset. The highest increase (9.8%) will be for UK employees aged 21-22. Below are the new rates according to

  • National Living Wage - £9.50 (6.6% rise)
  • 21–22-year-old rate - £9.18 (9.8% rise)
  • 18–20-year-old rate - £6.83 (4.1% rise)
  • 16–17-year-old rate - £4.81 (4.1% rise)
  • Apprentice Rate - £4.81 (11.9% rise)
  • Accommodation Offset - £8.70 (4.1% rise)

The national minimum wage rates for the UK have stayed unchanged since April 2021. However, the rates are set to increase higher in 2022 as the government plans to achieve its goal of a national living wage of two-thirds of median wages by 2024.

How does it affect your finances?

The increase may be good news for your wallet, however, it occurs as the dreaded National Insurance rate also rises. As part of the government's proposal to compensate for the costs of social care, millions of workers will pay higher National Insurance starting in April. A £25,000 annual wage will pay roughly £193 more in National Insurance due to the 1.25% increase. On the other hand, a £50,000 salary will pay around £505 more. Approximately 25 million Britons are expected to experience substantial financial hardship because of this hefty increase. Several other increases are expected in April, including:

  • Universal Credit, state pension and benefits rise
  • Pension boost for part-time workers
  • Surplus earnings threshold for Universal Credit
  • Council tax rise

Further, the council tax rates that regularly rise every year are expected to increase by an average of £400 per home.

The UK might increase its minimum wage this week The UK might increase its minimum wage this week