NLW rise comes into effect

By Nikkie Thatcher

- Last updated on GMT

Wage push: the increase is the smallest rise in recent years (image: Getty/xur82)
Wage push: the increase is the smallest rise in recent years (image: Getty/xur82)

Related tags: National living wage, Finance, Legislation, National minimum wage, Government

The increase in the national living wage (NLW) and the national minimum wage (NMW) takes place from today (Thursday 1 April).

Chancellor Rishi Sunak announced the 2.2% rise to £8.91 an hour in the spring Budget last month (Wednesday 3 March).

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

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

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.

Age threshold lowered

Full increases from Thursday 1 April 2021:

  • National living wage (for those aged 23 and over) increased 2.2% from £8.72 to £8.91
  • National minimum wage (for those aged 21 to 22) increased 2% from £8.20 to £8.36
  • National minimum wage (for those aged 18 to 20) increased 1.7% from £6.45 to £6.56
  • National minimum wage (for those age under 18) increased 1.5% from £4.55 to £4.62
  • Apprentice rate has increased 3.6% from £4.15 to £4.30

However, as part of the increase, younger people will now be eligible for the NLW for the first time as the age threshold is lowered from 25 to 23-years-old.

At the time, 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.”

On the rise coming into effect from today (Monday 1 April), Prime Minister Boris Johnson said it would be a welcome boost for families.

Reminder for employers

Chancellor Sunak added: “We know the past year has been very difficult for businesses and families across the country.

“This pay rise will help support employees as we steadily reopen the economy and get more people back to work.”

The increase is protecting workers by putting more money in the pockets of the UK’s lowest paid, according to business secretary Kwasi Kwarteng.

He said: “To support our next generation of workers, we’ve also lowered the age threshold for the Living Wage to 23 - ensuring even more people have the security of a decent wage. 

“This increase will help millions of families in every corner of the country, while supporting businesses as we prepare to safely reopen our economy and build back better from the pandemic.  

“I’d urge all workers to check their pay packet to ensure they’re getting what they are entitled to and remind employers of their duty to pay the correct wage.”  

Related topics: Legislation

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