National living wage and state pension set for 'largest ever increases' as Chancellor vows 'we are on your side'

17 November 2022, 12:21 | Updated: 17 November 2022, 13:33

Hunt announces 9.7% rise in National Living Wage

By Daisy Stephens

Both the national living wage and the state pension are set for the largest increases ever, Chancellor Jeremy Hunt has announced in his Autumn Statement.

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The national living wage for those over 23 will be raised from £9.50 to £10.42.

Mr Hunt said the rise would benefit over two million people in the UK, and claimed it is the largest ever increase in the UK's national living wage.

The 9.7 per cent increase will come into force in April 2023.

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"This government introduced the national living wage, which has been a giant step in eliminating low pay," he told the Commons.

"So today I'm accepting the recommendation of the low pay commission to increase it next year by 9.7 per cent.

"That means that from April [2023], the hourly rate will be £10.42 which represents an annual pay rise worth over £1,600 to a full-time worker.

"It's expected to benefit over two million of the lowest-paid workers in our country."

He added: "It is the largest cash increase in the UK's national living wage ever."

Rates will rise by 10.9 per cent to £10.18 for people aged 21-22 and by 9.7 per cent to £7.49 for 18 to 20-year-olds.

Those aged 16 and 17 will see the hourly rate increase by 9.7 per cent to £5.28.

Pension triple lock to be upheld

The Chancellor also confirmed the pensions 'triple lock' - the guarantee that they will rise with inflation - will be maintained.

"The cost of living crisis is harming, not just our poorest pensioners, but all pensioners," he said.

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"So because we've taken difficult decisions elsewhere today, I can also announce that we will fulfil our pledge to the country to protect the pensions triple lock."

The announcement was met with cheers in the Commons.

He went on: "In April, the state pension will increase in line with inflation - an £870 increase, which represents the biggest ever increase in the state pension.

"And to the millions of pensioners who will benefit from this measure, I say - now and always, this government is on your side."

Hunt: Personal tax

The Living Wage Foundation welcomed the announcement about the minimum wage, but said the rates would still be lower than the voluntary so-called real living wage of £11.95 in London and £10.90 outside the capital.

"There are now over 11,000 employers, committed to always paying their staff, including contractors like cleaners and security guards, the real Living Wage," said Katherine Chapman, director of the Living Wage Foundation.

"Living Wage Employers provide stability and certainty to the employees who will need it most ahead of a tough winter.

"This helps move us towards a high-wage, high-growth economy as employees earning a decent wage are likely to be more productive and able to spend in their local economies."

Money Saving Expert's Martin Lewis also pointed out that the increase to wages was still lower than inflation, meaning those on minimum wage will still be worse off than they were a year ago.

Hunt: 'OBR confirms recession is lower under new plans'

Mr Hunt said he wanted to create a "high wage, high skill economy".

He used his Autumn Statement to announce a range of tax hikes, claiming he "tried to be fair by following two broad principles" - making better-off households pay more and avoiding damage to growth.

"British families make sacrifices every day to live within their means and so too must their government," he said.

"This is a balanced plan for stability."