THE minimum wage in the UK will increase on April 1, 2021, giving a pay rise to more than two million workers. Chancellor Rishi Sunak revealed the announcement during his spending review set out in the Commons in November 2020 but has now confirmed it in his Budget speech.
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What is the National Minimum Wage?
The National Minimum Wage is currently the amount workers under 23 (but of school-leaving age) are entitled to. The age workers were eligible has been reduced from 25. The first National Minimum Wage was set in 1998 by the Labour government. Before that, no official rate existed although trade unions battled hard to fight their workers’ corner. The National Minimum Wage was re-branded to the National Living Wage in 2016 for those over 25. Sunak accepted “in full” the recommendations from the Low Pay Commission. He also announced that that the full national minimum wage rate, which from April 2021 only apply for those aged 21-22, will also increase. Sunak said: “Taken together, these minimum wage increases will likely benefit around two million people. “A full-time worker on the national living wage will see their annual earnings increase by £345 next year. “Compared to 2016, when the [NLW] policy was first introduced, that’s a pay rise of over £4,000.” Sunak revealed in his Budget speech to the Commons: People who are aged 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 is also due to increase by 3.6%, pushing up the hourly rate from £4.15 to £4.30. The National Living Wage is currently £8.72 an hour and will rise by 19p to £8.91 – an increase of 2.2% – from April.
National minimum wage: April 2021 increases by age
Mr Sunak said in the Budget statement today: “Over the course of this year, as the economy begins to recover, we are shifting our resources and focus towards getting people into decent, well-paid jobs. “We reaffirm our commitment to end low pay, increasing the National Living Wage to £8.91 from April – an annual pay rise of almost £350 for someone working full time on the National Living Wage.” Anyone who thinks they are not getting the National Living Wage or National Minimum Wage should complain to their employer in the first instance. If this does not get anywhere, the next step is to take the complaint to HMRC who will investigate.
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Which workers do not qualify for the National Minimum Wage?
Those who are self-employed, voluntary workers, company directors and family members who live in the home of the employer and do household chores do not qualify for either rate.
There is no difference in pay for those that live in London compared to elsewhere. The only discrepancy is for people working in agriculture or horticulture. Workers already employed before October 1, 2013, are entitled to the pay set under their contract of employment.
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