Minimum wage UK

Should you be paid the UK minimum wage, UK living wage or London living wage?

Comments0 comments

Should you be paid the UK minimum wage, UK living wage or London living wage? Find out which one applies to you to ensure you are receiving the right minimum wage in the UK.

The national UK minimum wage is based on a minimum UK wage per hour, applicable to all jobs in the UK. The government reviews the minimum wage in the UK annually in April, after taking advice from an independent body called the Low Pay Commission.

All UK employers must agree to pay at least the national minimum wage (NMW UK) to workers up to the age of 25. For workers older than 25 years, the national UK living wage (NLW) instead applies, which is set at around 50 pence higher than the NMW.

The amount of UK minimum wage that workers receive depends on which age bracket they fall into. To be entitled to the UK minimum wage they must be of at least school leaving age, which is generally 16 years old in England.

This guide explains everything an expat needs to know about the differences between the UK minimum wage and the living wage in the UK, the rate of UK minimum wage in 2017, plus steps to take if you are being underpaid and not receiving the UK national minimum wage.

Living wage UK

Minimum wage in the UK

The minimum wage in the UK has steadily increased in recent years, at an annual rate of between 20–30 pence per hour since 2009. The UK minimum wage is calculated at an hourly rate but applies to all types of work in the UK even if the employee is not paid per hour (including payments per project).

According European Commission in 2017, the UK minimum hourly wage compared favourably to almost all of its European neighbours by ranking 7 out of the 22 countries included in the study. However, this still places the UK minimum wage lower than Luxembourg, the Netherlands, Belgium, Germany, France and Ireland.

In addition to full-time employees, any workers who fit in the following categories are entitled to the minimum wage in the UK:

  • Part-time
  • Casual
  • Agency
  • Apprenticeship (different wage applies)
  • Trainee
  • Agricultural
  • Seafarer
  • Offshore
  • Disabled

Apprentices are entitled to an apprentice rate if they’re aged under 19 or are in the first year of their apprenticeship. If you’re over 19 or beyond your first year, you should be paid the full UK minimum wage for your age group. The minimum wage for apprenticeships is set at GBP 3.40, although this will increase to GBP 3.50 per hour in April 2017.

Self-employed workers in the UK, company directors and volunteers are not required to receive the UK minimum wage.

UK minimum wage and living wage in 2017

The UK national minimum wage is reviewed annually and varies depending on the employee's age. The most recent increase in April 2017 represented a 4 percent rise, expected to put an extra GBP 600 in full-time workers' pockets per year. However, the rise was still criticised by some as inadequate considering the higher cost of living in the UK.

The UK minimum and living wage rates in 2017 are:

Age UK minimum wage per hour 2017 2016
25 years and older GBP 7.50 (national living wage, NLW) GBP 7.20
21–24 years GBP 7.05 GBP 6.95
18–20 years GBP 5.60 GBP 5.55
Under 18 years GBP 4.05 GBP 4.00
Apprentice GBP 3.50 GBP 3.40

UK living wage 

The UK national living wage (NLW) was introduced in April 2016, requiring employers to pay any staff aged 25 or older a higher wage (around 50 pence higher) than the national minimum (NMW). As of April 2017, the UK living wage is GBP 7.50.

The UK statistics office (ONS) reported that the main age groups positively affected by the creation of the national living wage were 25–29 year olds and those older than 60, from which some 9 percent of workers were previously paid below the NLW.

London living wage versus minimum wage

London's minimum wage is the same as the national average, despite costs of living being significantly higher than in many other parts of the UK. This has led to criticism that the UK living wage (NLW) still isn’t high enough, especially for workers in London, as well as in southeast England.

The Living Wage Foundation calculates what it considers the ‘real’ cost of living each year, and partners with a group of businesses who agree to pay what they consider the UK's and London's ‘Real Living Wage’, although it is paid on a voluntary basis.

The organisations claims that the compulsory living wage should be set at GBP 8.45 per hour across the UK, and at GBP 9.75 per hour in London.

This movement has been popular in the UK, with almost 3,000 employers paying the voluntary ‘Real Living Wage’. You can ask your employer which minimum wage standard applies to your workplace.

UK minimum wage calculator

If you’re paid on a weekly or monthly salary, you should work out your equivalent hourly rate to check you’re being paid at least the UK minimum wage. To help you do this, the UK government provides a minimum wage calculator.

London living wage – London minimum wage

UK minimum wage for foreigners

If you’re a foreign worker in the UK, you are also entitled to be paid the UK national minimum wage or living wage, plus enjoy the same rights as UK citizens in terms of paid annual leave and sick pay too.

What to do if you’re paid less than the UK minimum wage

While most companies abide by the UK's minimum wage legislation, some still attempt to pay less than the amount required. The government reported in August 2016 that almost 200 employers failed to pay the UK minimum wage, and owed a total of GBP 465,291 to their employees. This took the overall total to 687 employers since October 2013, with arrears of more than GBP 3.5m in total.

If you think you’re being paid below the correct rate, you should first check your UK work contract and speak to your employer. If this doesn’t work, you should request payment records in writing from your company. You can also contact the ACAS helpline for confidential advice if required.

The government’s employment and tax department (HMRC) can fine your employer if it finds they haven’t been following UK minimum wage regulations, and if necessary can take them to court on your behalf.  

The Citizens Advice website provides further guidance for workers who believe they are being paid less than the minimum wage or living wage.

UK minimum wage contacts

 

Click to the top of our guide to UK minimum wage.
 
 
Expatica
 
 


Comment here on the article, or if you have a suggestion to improve this article, please click here.

If you believe any of the information on this page is incorrect or out-of-date, please let us know. Expatica makes every effort to ensure its articles are as comprehensive, accurate and up-to-date as possible, but we're also grateful for any help! (If you want to contact Expatica for any other reason, please follow the instructions on this website's contact page.)


Captcha Note: Characters are case sensitive
The details you provide on this page will not be used to send any unsolicited e-mail, and will not be sold to a third party. Privacy policy .

0 Comments To This Article