Is minimum wage going up? What is 2022 national basic pay increase - 2021 UK rate and Rishi Sunak planned rise

Chancellor Rishi Sunak is set to outline a minimum wage rise for workers aged 23 and over on the basic pay rate in the UK, according to reports

Rishi Sunak is set to deliver some welcome news for workers on the basic pay rate in the UK.

The chancellor is expected to use his budget speech to the House to outline a rise for minimum wage workers over the age of 23.

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His intention to provide lowest earners with a boost comes shortly after the £20 a week universal credit uplift ends and amid an energy crisis.

It also comes weeks after the government announced an increase in national insurance contributions to pay for social care reform and to clear a NHS backlog.

Here’s all you need to know about the intended minimum wage increase, how much it will rise by, when it will be introduced and why it has been brought in by the government.

Is minimum wage going up?

It is widely reported that Rishi Sunak is about to confirm a minimum wage rise for workers aged 23 and over on the basic pay rate in the UK.

This level of pay is called the National Living Wage - the minimum wage for workers aged 23 and over - and is different to the voluntary UK Living Wage.

The current minimum wage for workers aged 23 and over is £8.91, following an increase in April 2021 which was confirmed in chancellor Rishi Sunak’s budget.

The proposal also saw the age threshold for workers on the National Living Wage come down from 25 to 23, meaning 23 and 24 year olds benefited from a 71p an hour jump.

How much might minimum wage go up?

The National Living Wage could be raised by 5 per cent, which would see the hourly rate increase to £9.42 an hour from April 2022.

It comes after the low pay commission, a government’s advisory board, released a report that recommended an increase to £9.42 an hour.

The low pay commission will submit its final proposals to the government by the end of October 2021, with ministers set to follow the board’s advice.

"We will take guidance from the low pay commission, and we will see where we get to," said Boris Johnson in an interview with ITV prior to his Conservative Party speech.

What is the UK Living Wage?

The UK Living Wage and the London Living Wage are two voluntary pay benchmarks employers can sign up to - though they are not legally required.

The UK Living Wage works out a fair minimum rate of pay based on the costs of everyday needs, like food, rent and including utility bills, campaigners say.

The Living Wage Foundation, an independent organisation, which assesses the minimum wage required to live off says the UK’s real living wage is £9.50, or £10.85 for London.

There are reports the government could match the Living Wage Foundation recommendation of £9.50 an hour for 23 year olds and over in the next budget.

Since 2011, the Living Wage movement has delivered a pay rise to over 250,000 people and put over £1.3 billion extra into the pockets of low paid workers.

Is the universal credit uplift ending?

All the signs point towards the end of the £20 a week universal credit uplift, which was introduced by the government during the Covid pandemic.

Deputy prime minister Dominic Raab recently said: “The £400 billion that the government has put into supporting the economy, workers and the most vulnerable is just clearly unsustainable long term. The universal credit uplift was always going to be temporary.”

Labour has criticised the ending of the universal credit uplift and has organised for a sign to circulate outside the Tory Party conference in Manchester to reverse the decision.

Why is minimum wage going up?

An increase in minimum wage will be welcomed by lowest earners on an hourly rate.

It comes at a time when there is a shortage of fuel at the pumps, with the army being drafted in to deliver petrol and diesel to filling stations.

An energy crisis has seen wholesale gas prices skyrocket, some suppliers have gone bust, while monthly bills are set to significantly increase.

National insurance contributions are set to rise to pay for social care reform and an NHS backlog brought on by the Covid pandemic.

While inflation is on course to peak at 5 per cent before the end of the year - more than twice as high as the Bank of England’s target.

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