personal finance

Minimum and living wage set to increase in 2022 — will your pay go up?


Minimum and living wage are set to increase in 2022 following the Chancellor’s budget announcement — but are you eligible for the pay rise? Everything you need to know

Apprentice
Apprentice pay is also set to rise in 2022

The announcement of a new national minimum wage has come as part of the budget announcements.

The Chancellor, Rishi Sunak, announced that he would be raising the national minimum wage to £9.50, in a major increase.

The previous rate of £8.72 is set to enjoy an 88 pence bump equal to 6.6%, a figure that is set to more than double the current increases to the cost of living which have seen a spike of 3.1% in the last 12 months.

However, the Bank of England has warned that the cost of living could continue to increase to 4% in December and remain that high until the spring.

The government has been facing pressure to help younger and low income workers who are thought to have suffered most during the pandemic.








Rishi Sunak the night before the budget
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Image:

@RishiSunak /Twitter)



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Chancellor Rishi Sunak said the rise: “Ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament.”

However the shadow Chief Secretary of the Treasury, Bridget Phillipson, said the increase was an “underwhelming offer” that was likely to be predominantly negate by tax rises and the hikes in the cost of living.

Who will get the minimum wage increase?








Minimum wage increases are great for pub staff – but owners say they have to pass the cost on, pint prices expected to increase by 30p
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Image:

Getty Images)





Around two million people in the UK are expected to benefit from the 6.6% raise, which is expected to come into effect on April 1 2022.

Workers currently on the minimum wage will be receiving the extra cash, which for those working 40 hours a week could amount to around an extra £5 per week or £1,800 per year.

This will become the absolute lowest most workers will be getting paid. But there will be exceptions.

While the headline announcement regards workers over 23, the national minimum wage for 21 to 22-year-olds is set to increase from £8.36 to £9.18.

Meanwhile the National Minimum Wage for 18 to 20-year-olds is due to increase from £6.56 to £6.83 while for under-18s it will grow from £4.62 to £4.81.

Will pay for under 16s rise?








Chief Secretary of the Treasury, Bridget Phillipson has called the increase an “underwhelming offer”
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Image:

Getty Images)





Workers who are self-employed are set to miss out on the boost, as are all those who are aged under 16.

If you live with a family and do not pay for accommodation or meals then you will also not be entitled to the boost.

Neither will members of the armed forces.

Trainees and interns will not be eligible, however they are likely to have a separate minimum wage in many cases. The minimum rate for apprentices is set to increase from £4.30 o £4.81.

Some farm workers, volunteers and people on work experience will also not be eligible to the bump.


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