The government sets the minimum amount employees must be paid on average for the hours they work. This is called the National Minimum Wage (NMW) or the National Living Wage (NLW) for employees aged 23 or over from April this year. The rate increases each year on 1 April. 

NLW and NMW changes for 2021 

This year the age of employees eligible for the NMW will go down to 23 from the current age of 25 and the rates will increase by 2.2% to £8.91 per hour. Employees between 23 and 24 years old will receive an increase of almost 9%. 
In November last year the Chancellor accepted the Low Pay Commission’s recommendations and announced that the full NMW rate, which will only apply for employees aged 21 to 22, will also increase by 2.0% to £8.36. 
For 18 to 20-year-olds, the increase will be from £6.45 to £6.56 per hour and for 16 to 17-year-olds, the rise will be from £4.55 to £4.62 per hour. Apprentices will receive an increase of 3.6% from £4.15 to £4.30 per hour. 
In the 2020 budget, the government set a new target for the NLW to reach 66.7% of median earnings by 2024, compared with 60% today. 

At a glance - national living wage rates for 2021/22 

The rates change every April. Here are the NLW and NMW rates for 2021/22. 
Rate from April 2020 
Rate from April 2021 
Aged 25 and above 
23 to 24-year-olds 
21 to 22-year-olds 
18 to 20-year-olds 
16 to 17-year-olds 
Apprentice rate 
Accommodation offset 
Source: Low Pay Commission recommendations. * National living wage. 

Who receives the NLW and NMW 

These rates apply to people who are: 
casual labourers, for example someone hired for one day at a time 
agency workers 
workers and homeworkers paid by the number of items they make 
trainees and workers on probation 
disabled workers 
agricultural workers 
foreign workers 
offshore workers. 
The apprentice rate applies for people who are either: 
aged under 19 
aged 19 or over and in the first year of an apprenticeship. 
For example, an apprentice aged 22 in the first year of their apprenticeship will be entitled to a minimum hourly rate of £4.30. If they have completed the first year of their apprenticeship, they will be entitled to a minimum hourly rate of £8.36. 

Who doesn’t receive the NLW or NMW 

Your employment status and other categories of work might mean that you don’t qualify for the NLW or NMW. This affects: 
self-employed people running their own business 
company directors 
volunteers or voluntary workers 
workers on a government employment programme 
members of the armed forces 
family members of an employer who live in the employer’s home 
non-family members living in the employer’s home who share in work and leisure activities, are treated as one of the family and are not charged for meals or accommodation, such as au pairs, for example 
workers younger than school leaving age (usually 16) 
students in higher and further education, in work experience or a work placement for up to one year 
people shadowing others at work 
people on government pre-apprenticeship schemes 
people working on a Jobcentre Plus Work trial for up to six weeks 
share fishermen 
people living and working in a religious community. 
You can use the government’s minimum wage calculator to check entitlements. 
Please get in touch if you would like to know more about NLW and NMW. 
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