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Changes to National Living and Minimum Wage

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Chancellor Rishi Sunak recently announced increases to both the National Living and Minimum Wage.

There will be an increase of 19p for the National Living Wage (NLW), unfortunately this was 3.4% lower than expected. However from April 2021 the NLW will be the statutory minimum wage for workers aged 23 and over. This represents a welcome change from the current age bracket of 25 and over and is positive news for many younger people.

The National Minimum Wage (NMW) increases varied according to age, for those 21-22 it will rise 2%, those 18-20, 1.7% and those aged 16-17 a small rise of 1.5%. The largest increase seen was for the apprentice rate which will rise 3.6%, in line with the governments support for apprenticeship schemes as part of their Plan for Jobs.

From April 2021, minimum pay rates will increase as follows:

  • NLW (workers aged 23 +)  - from £8.72 to £8.91 per hour
  • NMW rates:
    • workers aged 21-22 – from £8.20 to £8.36 per hour
    • workers aged 18-20 – from £6.45 to £6.56 per hour
    • workers aged 16-17 – from £4.55 to £4.62 per hour
    • apprentice rate – from £4.15 to £4.30 per hour.

Whilst the increase in NMW and NLW rates are good news for workers, this may present further cost implications for businesses who will need to decide how to meet this increased cost.  This could mean increased charges to customers or implementing further cost saving initiatives in the workplaces.  To read more please click here.

For advice on any employment law issue, please get in touch with our specialist team by emailing Reyhana Koser or Ellie Robinson-Brady or call us on 0800 118 1500.