National Living Wage (NLW) and National Minimum Wage
(NMW) – Supported by
the NLW, the
lowest earners (full-time workers at the fifth percentile) have
seen their wages grow by 8% above inflation since 2015. The
government’s objective is for the NLW to reach 60% of median
earnings by 2020, subject to sustained economic growth. Following
the recommendations of the independent Low Pay Commission
(LPC), the government
will increase the NLW by 4.9% from £7.83 to
£8.21 from April 2019. The LPC estimate that this will
benefit around 2.4 million workers. In total, the annual earnings
of a full-time minimum wage worker will have increased by over
£2,750 since the introduction of the NLW in April 2016. The
government will also accept all of the LPC’s recommendations for the
other NMW rates to apply from April
2019, including:
-
increasing the rate for 21 to 24 year olds by 4.3% from £7.38
to £7.70 per hour
-
increasing the rate for 18 to 20 year olds by 4.2% from £5.90
to £6.15 per hour
-
increasing the rate for 16 to 17 year olds by 3.6% from £4.20
to £4.35 per hour
-
increasing the rate for apprentices by 5.4% from £3.70 to
£3.90 per hour
The government has an aspiration to end low pay. In 2019,
the government will set out the LPC’s remit for the years beyond
2020. In the coming months, it will consult with
the LPC and
others on this new remit, and as it sets policy will take account
of the potential impact on employment and economic growth.
Extension of the New Enterprise Allowance (NEA) – The government will
continue the NEA from April 2019
onwards. The NEA provides support and
mentoring for benefit claimants who are looking to start or
develop their business.
