Spring Budget 2021

NLW to rise to £8.91 from April

By Nikkie Thatcher

- Last updated on GMT

Upping wages: the rise will take place from April 2021 (image: Getty/smolaw11)
Upping wages: the rise will take place from April 2021 (image: Getty/smolaw11)

Related tags Employment Wage National living wage Government Finance Legislation

The national living wage (NLW) will be increased by 19p (2.2%) to £8.91 from April, Chancellor of the Exchequer Rishi Sunak has announced.

In the spring Budget today (Wednesday 3 March), Sunak outlined the Government’s plans for the economy as the country aims to recover from the coronavirus crisis.

The increased rate is equivalent to an additional £345 for year for employees working in a full-time job.

The current rate for the NLW (for those ages 25 and over) is £8.72 an hour and the latest rise is the smallest increase in recent years.

Previous increases

The rise in the previous year April 2019 was 51p, the year before that (April 2018) was 38p, for April 2017 the difference was an increase of 33p and in 2016, it was 30p.

The latest announcement also means those aged 21 to 24 will be paid £8.20 per hour, those aged 18 to 20 will receive £6.45, under 18s will get £4.55 and apprentices will get £4.15 as part of the national minimum wage.

Today, Sunak said since March, more than 700,000 people had lost their jobs and the economy had shrunk by 10%.

Budget plans

However, he also stated the Office for Budget Responsibility now expect the economy to return to pre-Covid levels by the middle of 2022 – six months earlier than previously thought and it also predicts the economy will grow by 4% this year.

UKHospitality chief executive Kate Nicholls said: "Increases in any fixed costs in the current climate present an immediate threat to jobs and businesses. The best thing for the sector and the country is that businesses are able to concentrate about safeguarding jobs and growing their businesses, in order to be able to then create more job in safer and more valuable roles.”

As part of today’s Budget statement, the Chancellor also confirmed the furlough scheme would be extended​ until the end of September, with employer contributions of 10% in July and 20% in August and September to be asked for.

This was alongside a freeze in alcohol duty​ and a continuation of the business rates holiday​. The cancellation of rates will carry on until June when operators will then be asked for discounted rates of two thirds up to £2m for closed businesses and a lower cap for those who have been able to open for nine months.

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