Frozen tax thresholds and inflation will combine to leave families facing the largest squeeze since the early 90s, according to a leading economic think tank.
How much will the minimum wage go up in 2023?
The National Living Wage will rise by 9.7 per cent to £10.42 an hour – this rate applies to workers aged 23 or over.
Those who are at least of school leaving age are entitled to the minimum wage, which is on a sliding scale depending on their age.
All minimum wage bands will see a 9.7 per cent rise too, except for those aged 21 to 22, who will get a 10.9 per cent increase.
Apprentices are entitled to the apprentice rate if they’re either aged under 19, or aged 19 or over and in the first year of their apprenticeship.
However, they are entitled to the minimum wage for their age if they are both 19 or over and have completed the first year of their apprenticeship.
All of the new minimum wage rates will come into effect from 1 April 2023, as is the case every year.
Here is the full breakdown of minimum wage increases for 2023:
- National Living Wage (aged 23 or over): from £9.50 to £10.42
- Minimum wage aged 21 to 22: from £9.18 to £10.18
- Minimum wage aged 18 to 20: from £6.83 to £7.49
- Minimum wage for under-18s: From £4.81 to £5.28
- Apprentice rate: £4.81 to £5.28
When making the announcement in November, Mr Hunt told Parliament: “I am accepting the recommendation of the Low Pay Commission to increase it next year by 9.7 per cent.
“That means, from April 2023, the hourly rate will be £10.42, which represents an annual pay rise worth over £1,600 pounds to a full-time worker.”
What prices are going up in April?
Your council tax bill is very likely to increase in April. Councils now have the freedom to raise tax by 3 per cent, plus another 2 per cent for social care, without holding a referendum, and the government expects about 95 per cent to do so.
It means council tax could rise from an average of £1,966 to £2,064 a year.
Your utilities are also likely to cost more, with water bills rising an average of £31 or 7.5 per cent in England and Wales.
And you should get ready for mid-contract rises on your broadband, TV and mobile phone bills, which are typically linked to inflation (plus about 4 percentage points) – this means that they could rise by more than 17 per cent.
Prescription charges are increasing by 3.21 per cent, adding 30p to the cost of a single item and taking the cost of each one to £9.65.
However, if you had been preparing for your energy bills to head skyward from April, there’s some good news.
In his Budget, the Chancellor, Jeremy Hunt, announced that the Government’s energy price guarantee would remain at its current level of £2,500 for a further three months.