THE National Living Wage is set to rise by £345 a year from April, Chancellor Rishi Sunak has confirmed.
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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.
This is the equivalent of £345 extra per year for someone working full-time.
The wage boost will also apply to 23 and 24-year-olds. Currently, the national living wage is only available to those aged 25 or above.
The increase is expected to benefit around 2million of the UK’s lowest paid workers.
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
Meanwhile, 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 pay boost comes after the new rates were recommended by the independent Low Pay Commission.
The Sun first reported back in September how the Chancellor was considering a smaller national living wage rise.
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.”
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.