Millions of workers across Britain are set for a huge pay rise in just weeks after the Government confirmed major increases to the National Living Wage and Minimum Wage in a gamble Sir must hope will not damage business.
From April 1, more than three million workers will see their wages rocket as the new rates come into force – handing full-time employees an extra £1,400 a year. And a further four million could benefit from knock-on effects.
The National Living Wage will jump to £12.21 per hour, while the National Minimum Wage for younger workers (18-20) will soar to £10 an hour – a record rise worth an extra £2,500 a year for full-time employees.
The move, part of the Government’s Plan for Change, is designed to put more cash in the pockets of hardworking Brits and boost economic growth. However, business leaders warn they may be forced to cut back on recruitment and investment to cover the cost.
Some, particularly those in pubs, hospitality and retail, have suggested these increases, combined with a rise in the National Insurance contributions paid by employers, amount to a “jobs tax” that will hit their ability to invest and grow while pushing up prices.
The National Living Wage will jump to £12.21 per hour (Image: Getty)
The changes from April will mean:
* The National Living Wage for those aged 21 and over will rise from £11.44 per hour to £12.21 per hour.
* The National Minimum Wage for 18- to 20-year-olds rises from £8.60 to £10.00 per hour.
* The apprenticeship rate, and for 16- to 17-year-olds rises from £6.40 per hour to £7.55 per hour.
Employment Rights Minister Justin Madders hailed the increase, saying: “Economic growth only matters if working people feel the benefits. This will be a huge pay bump for millions, putting more money in their pockets and boosting the high street.”
Chancellor Rachel Reeves said: “We promised a genuine living wage, and we are delivering. This pay rise will help hardworking Brits cope with the .”
And Deputy Prime Minister added: “We’re fulfilling our promise to make work pay. This is about giving workers the dignity they deserve and helping young people get ahead.”
End to ‘age discrimination’ in wages
For the first time ever, the and inflation have been taken into account to determine the new rates. In a historic change, the gap between younger and older workers is being closed, with plans to create a single adult wage rate in the future.
Low Pay Commission Chair Baroness Stroud said the move was a “big step towards a real living wage”.
Meanwhile, apprentices will also get a huge boost, with pay jumping 18% from £6.40 to £7.55 an hour. An 18-year-old apprentice in industries like construction will see hundreds more in their pay packets.
Biggest pay rise in years
The increase comes as wages are finally rising at their fastest rate in years, after the cost-of-living crisis meant Brits suffered the biggest squeeze in living standards in 200 years.
TUC boss Paul Nowak said: “This will make a real difference to the lowest paid, at a time when one in six are skipping meals just to get by. More money in people’s pockets means stronger high streets and better local economies.”
Businesses now have just weeks to get ready for the payroll changes, with experts warning employers to make sure workers are paid correctly.