The Chancellor has confirmed a 9.7% rise in the national living wage from April, worth over £1,800 a year for a full-time worker
The hourly rate will increase from £10.42 to £11.44, the biggest cash increase in the national living wage in more than a decade and fulfils the government’s manifesto pledge to end low pay.
Eligibility will also be extended by reducing the age threshold to 21-year-olds for the first time. A 21-year-old will get a 12.4% increase, from £10.18 this year to £11.44 next year, worth almost £2,300 a year for a full-time worker.
National minimum wage rates for younger workers will also increase for 18-20 year olds with a £1.11 hourly pay rise to £8.60 per hour.
Since 2010 the national living wage will have doubled in cash terms from around £10,500 to nearly £21,000 a year. For the first time, 21 year olds will also be paid the hourly rate.
Chancellor Jeremy Hunt said: ‘Next April all full-time workers on the national living wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.
‘The National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.’
The minimum hourly wage for an 18-year-old apprentice in an industry like construction will see their minimum hourly pay increase by over 20%, going from £5.28 to £6.40 an hour.
Since 2010, the proportion of workers on low hourly pay has more than halved from 21.3% to 8.9%, supported by increases to the national living wage. Personal tax thresholds have doubled over that time, meaning a working person can now earn £1,000 a month tax-free for the first time.
Kate Shoesmith, REC deputy chief executive, said: ‘This rise rightly takes into account both cost of living increases and the slow path of pay growth over the last decade or so.
‘It will be a challenge for some employers to adapt but it should help make working in some sectors that are experiencing labour shortages, such as hospitality, care and retail, more attractive at a time when our data shows more than two million job postings in the UK.
‘But pay is not the only thing workers require – flexible work that allows someone to manage their other life commitments is often top of the list for jobseekers.’