The rising costs of living are now, more than ever, at the forefront of our mind. On 23rd March 2022, the Office for National Statistics documented a 6.2% increase in inflation over the last 12 months, which is expected to rise when they release the updated figures on 13th April 2022.

In a bid to counteract inflation, increases have been made to the national living and minimum wage, statutory sick pay and family friendly payments (statutory maternity pay, statutory adoption pay, statutory paternity pay and statutory shared parental leave). However, it is questionable whether these payments go far enough to protect those employees that rely on them the most.

The national living wage applies to workers aged 23 and over and has increased by 59p per hour, a rise of 6.6% from April 2021 (further details of the increase, including those for workers aged under 23 and apprentices can be seen in the table below). The government argue the uplift in wages will benefit approximately 2.5 million UK workers, increasing their yearly salary by £1,000. Business Secretary Kwasi Kwarteng commented “While no government can control the global factors pushing up the cost of everyday essentials, we will absolutely act wherever we can to mitigate rising costs”.

However, considering the increase in energy bills, taxes and food price inflation reaching its highest since September 2013, the minimal increase in payments may not be as welcomed as the government had hoped. It is suggested that a fifth of workers across the UK will need at least a 10% pay increase to sustain a basic standard of living, meaning the increase to the national minimum and living wage for those aged 23 and over falls short by 3.4%.

A review conducted by the Low Pay Commission includes a target of reaching a national living wage rate of two thirds of median hourly earnings by April 2024, which based on their current projection would be £10.95 per hour. However, with workers increasingly looking to industrial action to communicate their dissatisfaction in pay, it is open to debate whether these projections may need to be significantly increased.

The government have also introduced increases to statutory sick payments and family friendly payments, which are detailed in the table below. The system for statutory sick pay (SSP) has previously been deemed broken and in need of urgent reform by the Chartered Institute of Personnel and Development (CIPD). It is therefore arguable that the minimal rise of £3 per week to SSP will also come under scrutiny.


National living and minimum wage

From 1st April 2022:

Workers aged 23 and over (national living wage)

£9.50 an hour

An increase of 59p per hour (6.6%)

Workers aged 21-22 (national minimum wage)

£9.18 an hour

An increase of 82p per hour (9.8%)

Development rate for workers aged 18-20

£6.83 an hour

An increase of 27p per hour (4.1%)

Young workers rate for workers aged 16-17

£4.81 an hour

An increase of 19p per hour (4.1%)

Apprentice rate

£4.81 an hour

An increase of 51p per hour (11.9%)


Statutory sick pay

From 3rd April 2022:

£99.35 a week – an increase of £3 per week.

 

Family friendly payments

From 3rd April 2022:

Statutory maternity and adoption pay

£156.66 per week, or 90% of the employee’s earnings if lower.


*The first six weeks will be paid at a rate of 90% of the employee’s average weekly earnings.

An increase of £4.69 per week.

Statutory paternity pay

£156.66 per week, or 90% of the employee’s earnings if lower.

An increase of £4.69 per week.

Statutory shared parental leave pay

£156.66 per week, or 90% of the employee’s earnings if lower.

An increase of £4.69 per week.