Minimum wage: The National Living Wage age threshold is changing amid 2.2% rate rise

Chancellor of the Exchequer Rishi Sunak announced the pay rise last month during the 2020 Spending Review. Around two million of the UK’s lowest-paid workers are expected to benefit from the increase to rates, the government said.

According to the government, the rises mean that the annual earnings of a full-time worker on the NLW will have increased by around £4,030 since its introduction in April 2016.

The new rates were recommended by the Low Pay Commission, and Ministers accepted these recommendations in full.

Business Secretary Alok Sharma said: “While this has been an extraordinarily difficult year for millions of people, this government remains absolutely committed to putting more money in the pockets of the UK’s lowest-paid workers.

“This measured rise strikes the right balance between supporting hard-working families through this tough time, while protecting firms as they recover from the impacts of COVID-19.”


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.

The Chancellor said: “I know people are struggling, and that they are worried about the months ahead.

“This above-inflation pay rise will help to protect the lowest paid and put more money in the pockets of hard-working families.”

Earlier this year, the Living Wage Foundation announced increases to the real Living Wage – rates which are voluntarily paid by 7,000 UK businesses.

It now stands at £9.50 per hour across the UK.

In London, the rate is slightly higher, standing at £10.85 per hour.

This is a voluntary rate which covers age groups from 18 and older.

These rates, for 2020/2021, were announced on Monday November 9 this year.

The Real Living Wage Foundation says employers should implement the rise as soon as possible, and within six months.

It adds that all employees should receive the new rate by May 9, 2021.

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