National Living Wage set to increase from April
The National Living Wage (NLW) is set to increase by 6.2% to £8.72 in 2020
The government has confirmed that the new rate will start on 1 April 2020 and will result in an increase of £930 annually for 2.8 million full-time workers on the NLW.
This is the biggest cash increase ever, rising from £8.21 to £8.72 per hour- this figure applies to over 25 year-olds.
What Boris had to say…
Prime Minister Boris Johnson said: ‘Hard work should always pay, but for too long, people have not seen the pay rises they deserve.
‘Our government will put a stop to that, giving nearly three million people a well-earned pay rise, including the biggest ever cash boost to the NLW.
‘As we enter a new decade, we are setting our sights higher, to help people earn more over the next five years and level up access to opportunity across our great country.’
The introduction of the NLW has delivered the fastest pay rise for the lowest earners in 20 years, the government claimed. As a result, low paid workers have seen their wages grow by 8% above inflation between April 2015 and April 2018.
Younger workers who are paid the national minimum wage (NMW) will also see their pay increase by 6.5% from £7.70 to £8.20 for 21-24 year olds.
For workers aged 18 and below, there will be a 4.6% increase from £4.35 to £4.55 an hour.
Apprentices will also see their wage rise by 6.4% from £3.90 to £4.15.
The Chancellor also plans to expand the reach of the NLW to cover workers aged 23 and over from April 2021, and to those aged 21 and over within five years. This is expected to affect around four million low paid workers.
Chancellor Sajid Javid, said: ‘We want to end low pay and put more money in the pockets of hard working families. This latest rise will mean that since we introduced the national living wage in 2016, the lowest paid will have had a wage increase of more than £3,600.
‘But we want to do more to level up and tackle the cost of living, which is why the NLW will increase further to £10.50 by 2024 on current forecasts.’
The government plans to set out more details on the future policy framework this spring.
2 Jan 2020
Report by Zak Jakubowski, Accountancy Daily
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