Spending Review: Rishi Sunak says National Living Wage will rise
The rates for the National Living Wage (NLW) and National Minimum Wage (NMW) change each April. During the Spending Review last year, Chancellor of the Exchequer Rishi Sunak announced the new rates.
They will come into effect in April this year.
Not only that, but there will be a change in the rules regarding the National Living Wage.
Currently, the government’s NLW is something which people need to be aged 25 to get.
The minimum wage applies to workers who are aged 24 and under, instead.
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To get the NMW however, the worker needs to be school leaving age.
In April 2021, the NLW will be extended to 23 and 24 year olds for the first time.
Furthermore, the Government has accepted in full recommendations made by the Low Pay Commission at the end of October.
As such, both the National Living Wage and National Minimum Wage will increase.
The National Living Wage will rise by 2.2 percent from £8.72 to £8.91 per hour.
Speaking in November, Bryan Sanderson, Chair of the Low Pay Commission, said: “Recommending minimum wage rates in the midst of an economic crisis coupled with a pandemic is a formidable task.
“The difficulty in looking forward even to next April is daunting.
“There are strong arguments concerning both low-paid workers – many performing critically important tasks – and the very real solvency risks to which small businesses are currently exposed.
“In these unprecedented conditions, stability and competence are prime requirements.
“Our value as a social partnership is to use the imperfect economic evidence to produce a recommendation which is professionally researched and dispassionate.
“Most importantly, after much debate it has the support of the business, trade union and academic representatives who make up the Commission.
“We have opted for a prudent increase which consolidates the considerable progress of recent years and provides a base from which we can move towards the Government’s target over the next few years.”
New National Living Wage and National Minimum Wage rates
From April 2021, the new hourly rates and thresholds will be as follows:
- National Living Wage (23+) to increase 2.2 percent, from £8.72 to £8.91
- National Minimum Wage (21-22) to increase two percent, from £8.20 to £8.36
- National Minimum Wage (18-20) to increase 1.7 percent from £6.45 to £6.56
- National Minimum Wage (under 18) to increase 1.5 percent from £4.55 to £4.62
- Apprenticeship Wage to increase 3.6 percent from £4.15 to £4.30.
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