National Living Wage increase comes into effect

Approximately two million of the UK’s lowest-paid workers will benefit from an increase in National Living Wage and National Minimum Wage.

As of 1 April, the rate rises include a 2.2 per cent increase in the National Living Wage to £8.91, the equivalent of more than £345 extra per year for someone working full-time. It means someone working full time on the National Living Wage from April 2021 will be taking home £5,400 more annually than they were in 2010.

For the first time since it came into effect in 2016 more younger people will be eligible for the National Living Wage, as the age threshold will be lowered from 25 to 23 years old. The National Minimum Wage applies to those from school leaving age to 22. The uplift will particularly benefit workers in sectors such as retail, hospitality and cleaning and maintenance.

The new rates - announced at the Chancellor’s Spending Review 2020 - were recommended by the independent body the Low Pay Commission, following extensive consultation.

Business Secretary Kwasi Kwarteng said: “In this toughest of years, we’re protecting workers by putting more money in the pockets of the UK’s lowest paid. To support our next generation of workers, we’ve also lowered the age threshold for the Living Wage to 23 - ensuring even more people have the security of a decent wage.

“This increase will help millions of families in every corner of the country, while supporting businesses as we prepare to safely reopen our economy and build back better from the pandemic. I’d urge all workers to check their pay packet to ensure they’re getting what they are entitled to, and remind employers of their duty to pay the correct wage.”