finance

UK living wage to increase by 6.6% to £9.50 an hour


Low-paid workers in the UK will receive a 6.6 per cent pay rise from next April as ministers seek to soften the impact of rising living costs by lifting the national living wage.

Government officials confirmed that Rishi Sunak, chancellor, will use his Budget on Wednesday to formally announce plans to increase the wage, which applies to workers aged 23 and over, from £8.91 an hour to £9.50.

The rise has been recommended by the Low Pay Commission, the independent body that advises the government on the national living wage.

The increase amounts to an additional £1,000 a year for someone in a full-time role working about 35 hours a week.

Sunak will also announce on Wednesday that the national minimum wage for people aged 21-22 will increase from £8.36 to £9.18 an hour, while the apprentice rate will increase from £4.30 to £4.81 an hour.

“This is a government that is on the side of working people,” Sunak said. “This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this parliament.”

In September 2019, the Conservative government pledged to increase the national living wage towards a new target of two-thirds of median earnings by 2024, corresponding to about £10.50 per hour, making it the highest in the developed world.

The latest rise comes as the chancellor is under mounting pressure to provide more support for workers facing sharp rises in energy bills, as well as higher food and petrol prices.

Although consumer price inflation dipped to 3.1 per cent in September, Huw Pill, the Bank of England’s new chief economist, has warned inflation is likely to hit 5 per cent early next year.

The increase comes after ministers ended the temporary £20 weekly uplift to the main welfare benefit earlier this month. The increase to universal credit was introduced at the start of the coronavirus pandemic, at a cost of £6bn a year.

Bridget Phillipson, the shadow chief secretary to the Treasury, responded to Sunak’s announcement by saying: “This underwhelming offer works out at £1,000 a year less than Labour’s existing plans for a minimum wage of at least £10 per hour for people working full-time.

“Much of it will be swallowed up by the government’s tax rises, universal credit cuts and failure to get a grip on energy bills. It’s clear that Labour is the only party serious about improving the prospects of working people.”



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