National Living Wage to increase in 2020.

The national living wage is set to rise.  The question is by how much.  What will be the new minimum amount for the national living wage?

What is the national living wage?

The National Living Wage is the hourly rate for the minimum wage depending on your age and whether you are an apprentice.

The government has pledged to introduce a new National Living Wage in 2020.  This will help low-paid persons.  Those on lower incomes will earn nearly £1,000 more per year.

What exactly is the current National Living Wage and how is it changing in April?

The National Living Wage is an obligatory minimum wage paid to workers in the UK aged 25 and above.

Introduced in April 2016 by the then-Chancellor of the Exchequer George Osborne, the wage began at £7.20 per hour in April 2016. It was projected to rise to at least £9 per hour by April 2020.

What are the current National Living Wage rates?

The National Living Wage rates as of April 2019:-

Age 25 and over: £8.21 per hour

21 to 24: £7.70 per hour

18 to 20: £6.15 per hour

Aged under 18: £4.35 per hour

An apprentice: £3.90 per hour.

How are the National Living Wage rates changing in April 2020?

The National Living Wage rates will rise in April 2020 to:-

25 and over: £8.72 per hour

Age 21 to 24: £8.20 per hour

Age 18 to 20: £6.45 per hour

Aged under 18: £4.55 per hour

An apprentice: £4.15 per hour.

According to the government, these above-inflation increases will affect almost three million people. However, the promise falls short of the pledge of £9 per hour made in 2015.

The current gap between the increases and the target made in 2015 means workers aged 25 and over are losing out on wages of around £1,600 each year, according to the government’s estimates.

Compared to 2019, however, a full-time worker aged 25 will receive a pay rise of £930 each year after April 2020.

The Prime Minister, Mr Johnson said:

“Hard work should always pay, but for too long, people haven’t seen the pay rises they deserve.”

“Our government will put a stop to that, giving nearly three million people from Edinburgh to Eastbourne a well-earned pay rise, including the biggest ever cash boost to the National Living Wage.”

The Conservative Party promised to increase the National Living Wage to £10.50 an hour over the next five years if “economic conditions allow”.

Chancellor of the Exchequer Sajid Javid said:

“We want to end low pay and put more money in the pockets of hard-working families.

This latest rise will mean that since we introduced the National Living Wage in 2016, the lowest paid will have had a wage increase of more than £3,600.”

What is the difference between the National Living Wage and Minimum Wage?

The National Living Wage was introduced in 2016, whereas the minimum wage is a wage rate released by the government is a negotiated settlement based on recommendations from trade unions and businesses.

Companies are not legally obliged to sign up to the real living wage but can become an accredited real living wage employer if they choose to do so.

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