What Is the Minimum Wage in the United Kingdom?

FT Contributor
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What Is the National Minimum Wage in the U.K?

Unlike the United States minimum wage, the United Kingdom sets national minimum wage rates based on workers’ ages and whether they are apprentices. The U.K. government utilizes information gathered from the Low Pay Commission each year to potentially adjust the minimum wage rates. The U.K. national minimum wage is enforced to ensure workers can live independently on their full-time salaries.

When a minimum wage is enforced, all employers, no matter their size or industry, must pay workers at least the minimum hourly wage. The minimum wage that applies to workers is nonnegotiable and all workers are entitled to minimum wage by U.K. law.

U.K. Minimum Wages by Age Group

According to the Low Pay Commission, the U.K. sets different minimum wages that depend on the age group a worker falls into. In addition to age, whether a worker is an apprentice is also a factor taken into consideration when determining minimum wage.

If a worker is in their first year of apprenticeship, the apprentice minimum wage rate applies. Workers who are 19 or older and have completed their first year of apprenticeship must be paid at least the minimum wage rate for their specific age group. As of April 2020, the minimum wages in the U.K. are:

  • 25 and older: £8.72 an hour (National Living Wage);
  • 21 to 24 years old: £8.20 an hour;
  • 18 to 20 years old: £6.45 an hour;
  • Under 18: £4.55 an hour;
  • Apprentice: £4.15 an hour.

The minimum wage will change again in April of 2021.

Exceptions to the U.K.’s Minimum Wage Laws

The U.K. minimum wage laws do not apply to workers with disabilities and workers who are receiving long-term unemployment and taking part in a government work program. These workers are subject to the wages agreed upon with the government, which depend on their progress throughout the program. In most cases, the payments provided are lower than the minimum wage rate for workers in their age groups.

What Is the National Living Wage in the U.K.?

Only workers who are 25 and older qualify to receive the National Living Wage in the U.K. When a worker is 25 and older, their employer must pay the National Living Wage instead of the minimum wage. At least £8.72 must be paid per hour by any employer to an eligible worker who is 25 years and older. Essentially, the National Living Wage is just the minimum wage that employers must pay workers once they turn 25.

What Is the Living Wage in the U.K.?

It’s important to note that the National Living Wage in the U.K. is simply the minimum wage for workers who are 25 and older. The Living Wage is different from the National Living Wage and the minimum wage. The U.K.’s Living Wage is a calculation that takes into account the cost of living in the area and other economic factors.

U.K. employers must at least pay the minimum wage or National Living Wage to workers, but aren’t required to abide by the Living Wage. It’s only the recommended hourly wage for workers to afford basic necessities, such as a car, food, and a home. The Living Wage depends on inflation, the economy, and location.

Minimum Wage in the United Kingdom vs. the United States

In 2019, the U.K. had the seventh-highest minimum wage rate when compared to 25 other countries who observe minimum wage laws. When the U.S. average minimum wage was converted to Pounds sterling and compared with these same countries, it ranked 15th.

When comparing the U.K. minimum wage to the U.S. minimum wage, it’s important to also note other differences between the two countries. The U.K. offers universal healthcare, so employees who don’t purchase private health insurance are still entitled to free healthcare services without incurring medical expenses.

In the U.S., workers are sometimes offered health insurance coverage through their employer or may decide to purchase private policies on their own. If they don’t have health insurance, they’re responsible for the high costs of medical care without assistance. If you’re considering moving to the U.K., it’s important to analyze the costs of living in your target area, your age, and other government benefits provided, such as holiday pay and health care, to determine the salary you need to earn.

The minimum wage that applies to you depends on your age and whether you’re participating in an apprenticeship. While employers are required to pay either the minimum wage or National Living Wage, they aren’t legally required to pay a Living Wage.

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