MORE than two million workers will see their pay slips increase by £345 a year from tomorrow when the National Living Wage rises.
The National Living Wage is the government’s minimum rate employers are allowed to pay employees aged 25 or over for each hour worked.
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It is currently £8.72 an hour, but will rise by 19p to £8.91 from tomorrow – which means workers will get a 2.2% more in their pay slips.
The wage boost will now also apply to 23 and 24-year-olds from tomorrow, the national living wage is currently only available to those aged 25 or above.
The new rate was first revealed by the government in the Spending Review in November last year.
It was then confirmed in Rishi Sunak’s Budget earlier this month.
What is the National Living Wage?
THE national living wage is the government’s minimum rate employers are allowed to pay workers for each hour.
It was introduced by Tony Blair’s New Labour government in 1999 and was originally called the national minimum wage.
In 2011, a campaign group called the Living Wage Foundation was founded to persuade employers to voluntarily pay what it called the national living wage.
The national living wage was an independently-calculated estimate of the rate workers needed cover their basics needs, and was higher than the national minimum wage.
In his 2015 budget, George Osborne re-branded the national minimum wage as the national living wage, though he didn’t raise the rate to match the Living Wage Foundation’s recommended rate.
The minimum rate for those under 23 continues to be known as the national minimum wage.
Here are the new wage rates that will come into play from April 2021:
- Rate for people aged 23 and older and above to increase by 2.2% from £8.72 to £8.91 per hour
- Rate for people aged 21 to 22 years old to increase by 2% from £8.20 to £8.36 per hour
- Rate for people aged 18 to 20 years old to increase by 1.7% from £6.45 to £6.56 per hour
- Rate for people aged 16 to 17 years old to increase by 1.5% from £4.55 to £4.62 per hour
- Rate for apprentices to increase by 3.6% from £4.15 to £4.30 per hour
The boost is the equivalent of £345 extra per year for someone working full-time and will benefit around 2million of the UK’s lowest paid workers.
But it’s not as much as what the National Living Wage was expected to rise to.
Payslips were earmarked to rise from £8.72 to £9.21, but the increase was slashed to less due to the coronavirus crisis.
It was revealed in September last year there were concerns that British businesses wouldn’t be able to afford the extra cash needed for a bigger pay rise.
It meant the Chancellor faced calls in November to put any rise on hold after economists predicted a boost would throw 50,000 people on the dole.
The Centre for Policy Studies said any rise would risk deepening the recession and harming the work prospects of younger job-seekers.
But that was cast aside in Mr Sunak’s Spending Review that same month, when he said he would accept the Low Pay Commission’s recommendations to boost the National Living Wage by 2.2% “in full”.
Other working Brits aged below 23 will also get a pay packet boost from tomorrow.
Those aged between 21 and 22 will benefit from a 2% increase to the National Minimum Wage from £8.20 to £8.36.
For 18- to 20-year-olds, the minimum wage will rise from £6.45 to £6.56, and for under 18s, it’ll increase from £4.55 to £4.62 an hour.
In addition, the Apprenticeship Wage will increase by 3.6%, pushing up the hourly rate from £4.15 to £4.30.
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The national living wage is different to the real living wage, which is a voluntary amount that companies choose to pay their workers.
On November 9, 2020, it increased by 20p to £9.50 per hour for workers outside London.
In London, the real living wage has been boosted by 10p to £10.85.
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