The Government announced on 25 November 2020 the increased National Living Wage ("NLW") and National Minimum Wage ("NMW") rates that will come into force next April 2021.
The NLW currently only applies to workers aged 25 and over but from April next year it will be extended to cover workers aged 23 and 24 too. The NLW is also set to increase by 2.2%. The rate for apprentices sees the largest increase out of all the rates - up 3.6%.
All of the new rates are a recommendation by the Low Pay Commission to the Government and there is no doubt that this task in the middle of a pandemic would have been a tricky one. A balance was needed between ensuring low paid workers (especially those performing critical tasks) are able to afford to live and the need to keep employers afloat who may be facing economic problems this year.
The new rates from 6 April 2021 will be:
- Age 23 or over: £8.91 (currently £8.72)
- Age 21 to 22: £8.36 (currently £8.20)
- Age 18 to 20: £6.56 (currently £6.45)
- Age 16 to 17: £4.62 (currently £4.55)
- Apprentice rate: £4.30 (currently £4.15)
- Accommodation offset: £8.36 per week (currently £8.20)
The increase in the NLW will mean that low-paid workers’ incomes rise broadly in line with predicted wage growth; and modestly ahead of projected increases in prices, meaning low-paid workers’ living standards should be protected. Commissioners do not believe the increase presents a significant additional risk to employment prospects, beyond the already challenging outlook.