As reported in Accountancy Daily, the government has confirmed that the new rate for the National Living Wage (NLW) will start on 1 April 2020 (no, it's not an April Fool!) 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.
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. He is quoted as saying, "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 and we'll keep you updated as and when we have more information.
Julie Downie, Senior Accounts Manager