This briefing looks at trends in the value of the UK National Minimum Wage, the number of jobs paid at the National Minimum Wage and how the National Minimum Wage compares internationally.Jump to full report >>
The National Minimum Wage (NMW) applies to most workers and sets minimum hourly rates of pay. The rates are provided in regulations made by the Secretary for State with parliamentary approval, based on the recommendations of the Low Pay Commission (LPC).
NMW rates vary by age group. NMW rates vary by age group. From April 2019, the minimum wage is:
The value of each minimum wage rate has increased in real terms (i.e. has increased faster than prices) since the NMW was first introduced in 1999. However, in the aftermath of the 2008/09 recession, the real value of all minimum wage rates decreased. The various NMW rates are now above pre-recession levels in real terms, with the exception of the 16-17 rate, which is set to rise above pre-recession levels in April 2020.
The National Living Wage (NLW) is an NMW rate for workers aged 25 and over, introduced in April 2016. Unlike the other NMW rates, the National Living Wage has been subject to a Government target that its value must reach 60% of median earnings (the point at which half of people earn more and half earn less) by 2020. In April 2020, the National Living Wage is set to stand at around 60% of median earnings for people aged 25 and over.
The Low Pay Commission estimates that there were 2 million workers paid at or below the minimum wage in April 2019, around 7% of all UK workers. This compares to 1.5 million jobs paid at or below the NMW in 2015, before the introduction of the National Living Wage.
Jobs paid around the minimum wage are concentrated within a small number of low-paying occupations. The Low Pay Commission estimates that nearly half (48%) of all jobs paying at or below the minimum wage are in retail, hospitality and cleaning & maintenance occupations.
The UK has a relatively high minimum wage, in terms of monetary value, compared with other OECD countries. In 2019, the UK had the seventh highest adult minimum wage out of 27 OECD countries (based on the National Living Wage rate) after taking into account differences in the cost of living.