The original plan to boost the wages of lower paid workers from April 2021, with an increase of over 5%, has been scaled back with more modest rises of around 2.2% overall. This is more in line with inflation and seeks to protect the living standards of lower paid workers. Even this prudent increase will be a challenge for some businesses suffering the economic effects of the pandemic.
For the first time the National Living Wage has also been extended to 23 and 24 years olds. Previously the rate has only applied to people aged 25 and over.
Here are the new rates which apply from 1st April 2021:
| National Living Wage (now 23 and above) | £8.91 | ||
| Aged 21-22 inclusive | £8.36 | ||
| Aged 18-20 inclusive | £6.56 | ||
| Aged under 18 (but above school leaving age) | £4.62 | ||
| Apprentices aged under 19 | £4.30 | ||
| Apprentices aged 19 & over but in first year of apprenticeship | £4.30 |
The Low Pay Commission remains committed to the Governments goal of ending low pay and have not recommended any changes to the target of the National Living Wage equating to two thirds of median earnings by 2024. The full effects of furlough and the impact of the pandemic have yet to be assessed though and will be considered later this year when the Low Pay Commission make their recommendations for 2022. Hopefully, business may be starting to recover by then.
Please contact one of our HR Consultancy Team if you have any questions.
By Angela Stancer ACII – HR Manager