- Around 2 million of the UK’s lowest-paid workers
expected to benefit from increase in National Minimum
Wage and National Living Wage
- for the first time, the National Living Wage will
apply to 23 and 24 year olds
- measured increases will support Britain’s workforce,
while recognising the impact the COVID-19 pandemic has
had on business
Millions of workers across the country will receive a rise
in their pay, following an increase in the National Minimum
Wage and National Living Wage from April 2021.
In his Spending Review, the Chancellor confirmed that the
rate rises include a 2.2% increase in the National Living
Wage to £8.91, the equivalent of £345 extra per year for
someone working full-time.
For the first time, more younger people will be eligible
for the National Living Wage, as the age threshold will be
lowered from 25 to 23.
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.
Business Secretary 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.”
Chancellor of the Exchequer, , 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.”
The new rates were recommended by the Low Pay Commission,
an independent body made up of Commissioners from business,
worker and academic backgrounds, which advises the
government on the National Minimum Wage and the National
Living Wage. Ministers accepted their recommendations in
full.
The Low Pay Commission has not recommended any change to
the government’s target of the NLW reaching two-thirds of
median earnings by 2024, and this increase keeps the
government on track to meet that target.
The figures were calculated to provide a rise in pay for
millions of families across the UK, while ensuring
businesses can thrive as the country recovers from the
pandemic.
The announcement of the new rates has been made as early as
possible to provide added certainty for both workers and
businesses for the year ahead as the UK looks to build back
better from the impacts of COVID-19.
Throughout the pandemic our economic priority has always
been to protect jobs and incomes. Our unprecedented
furlough and self-employed schemes have protected the
livelihoods of over 12 million people, including those with
lower-incomes.
In full, the increases are:
- National Living Wage (23+) to increase 2.2%, from £8.72
to £8.91
- National Minimum Wage (21-22) to increase 2%, from
£8.20 to £8.36
- National Minimum Wage (18-20) to increase 1.7% from
£6.45 to £6.56
- National Minimum Wage (under 18) to increase 1.5% from
£4.55 to £4.62
- Apprenticeship Wage to increase 3.6% from £4.15 to
£4.30
Notes to editors
The 23-24 age category for the National Minimum Wage has
been abolished, following the lowering of the age of the
eligibility for the National Living Wage to 23 years old.
