If you’re considering moving to the UK, then you’ll want to read this moving to UK guide first! Find all you need to know about moving to the UK.
Living and working abroad is a dream for many people - whether that’s for a working gap year, a longer term career move, or to settle permanently in a new place. If you’re considering a move abroad, you’ll need to pay your way while you’re there. Understanding the likely wage you can earn - and of course the cost of living is important to make sure your move abroad is successful.
While salaries vary hugely in the United Kingdom, there’s a legal National Minimum Wage (NMW), in place. This is known as a National Living Wage for people aged over 25, and is designed to ensure that employers pay an hourly rate above a minimum threshold for all workers in the UK. Knowing your rights in regards to the NMW can help you figure out the minimum salary you can expect to achieve, and what lifestyle you can afford with that.
This guide tells you all you need to know about the minimum wage in the United Kingdom, and how it compares to the UK living wage, and minimum wages elsewhere in the world.
The National Minimum Wage in the UK is set depending on your age, and whether or not you’re an apprentice. It’s been in place since 2005, and several changes to the way it operates have been made over time. At present, the minimum wage applies to any worker aged 16 or over. However, there are some exceptions, such as people who are working in their employers home, or who are undertaking voluntary work. In these cases, the National Minimum Wage might not apply.
For eligible workers aged 25 and over, the minimum wage is known as a National Living Wage. It’s expressed as an hourly gross payment, and reviewed every April.
For the period April 2017, to March 2018, the National Living Wage paid to employees aged 25 or over, is £7.50 per hour.
The National Minimum Wage is set by the UK government. It’s reviewed every year, and usually, most categories see an annual increase. However, as the system is quite complicated and based on a number of different age bands, there have been years when employees of certain ages haven’t seen their minimum pay go up.
The current rate was set in April 2017, and will run to the end of March 2018.
The minimum wage varies depending on the age of employee. You have to be of school leaving age to qualify, which usually means you must be 16. Slightly different rules apply if you’re an apprentice, which are outlined below.
|NMW dates||Age 25+||Age 21-24||Age 18-20||Under 18 years|
|April 2017 - March 2018||£7.50||£7.05||£5.60||£4.05|
There’s a different minimum wage set for apprentices. This applies if you’re under 19 years old, or if you’re over the age of 19, but in your first year of an apprenticeship scheme. In this case, the minimum wage currently stands at £3.50 per hour gross.
If you’re still pursuing your apprenticeship when you hit 19 years old, and have completed at least a year of the programme, you should be entitled to the minimum wage for your age band - in this case £5.60 an hour.
Apprentices should also be given time to pursue their studies - usually a day or so a week, and holiday pay.
When you’re working out the practicalities of living in the UK, it’s important to take into consideration the cost of living in the United Kingdom. As you’d expect, it can be much more expensive to live in the capital, London, or some of the larger cities. However, the UK government’s minimum wages are national - meaning that the official minimum wage will be the same wherever you live in the country.
In many parts of the UK, there’s a gap between the National Minimum Wage and the amount you need to actually afford a decent lifestyle. The Living Wage Foundation calculates the London Living Wage to be £10.20 per hour, and says that the minimum amount you can live well on elsewhere in the UK is £8.75. If you’re just at the stage of working out the details of your move to the UK, it’s worth bearing these figures in mind.
If you consider getting a job in the UK use this handy hourly wage calculator to estimate your take-home pay from an hourly rate.
Living between countries or thinking of making a move? Wise could help you save when you send money abroad.
If you’re thinking of moving to the UK for work - or if you’re already juggling life between different countries - then there are some practical steps to make sure your money goes further. One common challenge for many expats and frequent travellers is the cost of converting your cash to different currencies when you’re abroad.
This can get costly in a couple of different ways. Firstly, you might be hit by unfair fees and charges, which leave you with less than you expect. And secondly, you could lose out if your bank or exchange service offers you a poor exchange rate. This often happens if banks or exchange services claim that they’ll change your money with low, or no fees. They still want to make a profit, so instead of charging upfront, they mark up the exchange rate and take the difference as their profit.
If you aren’t sure if your bank is giving you a good rate, you can check an online currency converter to compare the difference between the real exchange rate, and the one they’re offering you.
If you find your bank is ripping you off, don’t panic. You may find you can get a better deal with Wise. Wise uses the real exchange rate - the one you’ll find on Google - and charges only a low, upfront fee for transfers. That’s because while most money transfer services have high charges for moving money across borders using the SWIFT system, Wise does things differently than banks. By avoiding the costs of using SWIFT, Wise can pass on the savings to customers. That means that you get a fast, safe transfer, using the best exchange rate on offer - and no nasty surprises.
If you need to move your money between different currencies frequently, a borderless multi-currency account could save you money, and make your life much easier.
If you live in one country but work in another, you can get local bank details for the US, the UK, the EU or Australia so you can get paid like a local no matter where you call home. This way, you won’t have to pay expensive international fees for receiving or sending money abroad.
You can hold your money in dozens of different currencies and see your balance across them all at a glance. Then when you want to switch between them, you can move your cash between currencies easily, and with a low fixed fee. Send and receive cash, make direct payments, and from early 2018, you’ll be able to get a consumer debit card attached to your account, too.
The UK is one of the countries in the world which prefers to have a minimum wage set in law. This should protect workers from unscrupulous employers who want to pay too little. But on an international level, is it actually any good?
|Minimum Rate||£7.50||Varies by state - from about £5.50 to about £9.50||£7.90||£8.72||£4.25||£10.47|
Of course this is only part of the picture. Some other countries prefer their minimum wages to be set by collective agreements, made by trade unions and employers, and often enforced by law. This means that there could be different minimum wages depending on the sector. Belgium, Norway and Sweden work in this way, for example.
Other countries have a different way of managing minimum wages. Singapore has minimum wages set by the government, but only across some low income sectors. These minimum wages are applicable to Singapore nationals and permanent residents only - although employers are encouraged to extend them to other workers as a minimum, too. And yet other countries don’t have any minimum wage at all, preferring to leave employers and employees to negotiate on an individual basis.
If you’re considering a move to the UK, it’s a good idea to do your research in advance and make sure you can afford a lifestyle you’re happy with there. Cost of living in some areas of the UK is high, although jobs in these areas also tend to attract higher salaries. If you cut out unnecessary - and unfair - costs, such as excessive fees for your day to day banking, you can make the most of your money, no matter what your salary. Then you’ll have more in your pocket to enjoy all that the United Kingdom has to offer.
Who is entitled to NMW?
Current rates of minimum wage - November 2017
Groups not entitled to NMW:
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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