National Minimum and Living wages increase

UK workers are set to benefit from rises in the National Minimum Wage (NMW) and the National Living Wage (NLW) rates. These took effect from 1st April 2021.

The NLW which applies to 21-and 22-year-olds has risen from £8.20 to £8.36. The NLW has risen from £8.72 to £8.91. 23 and 24-year-olds are now eligible for the National Living Wage. Prior to 1st April 2021, only workers aged 25 and over were eligible.

The rates for National Minimum Wage and National Living Wage for all employees are as follows:

 

Previous rate

Rate from April 2021

Increase

National Living Wage

£8.72

£8.91

2.2%

21–22-year-old rate

£8.20

£8.36

2.0%

18-20-year-old rate

£6.45

£6.56

1.7%

16-17-year-old rate

£4.55

£4.62

1.5%

Apprentice Rate

£4.15

£4.30

3.6%

The change follows recommendations made to the government by the Low Pay Commission (LPC). It marks the first step towards the government’s target of the National Living Wage reaching two-thirds of median earnings for workers aged 21 and over by 2024.

Commenting on the wage increases, Bryan Sanderson, Chair of the LPC, said:

‘This week’s increase in the NLW is our first step towards the government’s target of two-thirds of median earnings. It is a real-terms increase, meaning that an hour’s work can buy more than it could last year at the start of the pandemic.

‘Young people should be fairly rewarded for their work. We will seek to understand how young people’s pay and employment are affected by this in our consideration of a further reduction in the NLW age qualification to 21.’

The Low Pay Commission will make recommendations to the government on the 2022 NMW and NLW rates in October.

Claire Judd, of Harvey, Telford & Bates discusses the increase in NWL and NMW:

“These increases in the National Living Wage and National Minimum Wage are a step in the right direction for employees. For employers, the changes in wage rates should have been implemented at the start of April. If you would like assistance in ensuring these new rates are met, please contact Harvey, Telford & Bates.”

For guidance and support on the wage rate increases, please contact us. Call us on 01743 462604 or email us at hello@htbaccountants.co.uk to schedule an appointment or speak to one of our team.

For more information, please find it on the Gov.uk site here

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