New National Living Wage (NLW) and National Minimum Wage rates will take effect from 1 April 2020.
The National Living Wage (for over 25-year olds) will increase 6.2% from £8.21 to £8.72.
The National Minimum Wage will rise across all age groups, including:
- A 6.5% increase from £7.70 to £8.20 for 21-24-year olds
- A 4.9% increase from £6.15 to £6.45 for 18-20-year olds
- A 4.6% increase from £4.35 to £4.55 for under-18s
- A 6.4% increase from £3.90 to £4.15 for apprentices
The NLW figure equates to an annual pay rise of up to £930 for a full-time worker. It will also trigger increases in employers’ National Insurance and pension contributions.
Furthermore, the Chancellor has pledged to increase the NLW towards a new target of two-thirds of median earnings by 2024, provided economic conditions allow. Based on current forecasts, this would make it around £10.50 per hour.
The Chancellor has also announced plans to expand the reach of the NLW to cover workers aged 23 and over from April 2021, and to those aged 21 and over within five years.
Trade associations reacted with concern to the announcement. NFRN National President Stuart Reddish said: “Above inflation increases will put even more pressure on local stores, many of whom have already had to cut staff in order to meet the increased payroll costs associated with the introduction of auto enrolment pensions.
“Many retailers rely on family members to help run their stores and already are unable to pay themselves the living wage for the hours that they work.”
Reddish called on the Prime Minister to use his parliamentary majority to take urgent steps to “support rather than penalise” retailers.