Increase in National Living Wage?

Source: HM Treasury | | 12/11/2019

An independent review into the evidence on minimum wage rates has been published by the government. The review concludes that increases in the National Living Wage (NLW) have little effect on employment whilst significantly increasing the earnings of low paid workers. This was found to be the case even in countries who had the most ambitious policies for increasing minimum wage rates. The report also concluded that there was room for the UK to explore a more ambitious National Living Wage (NLW) remit resulting in increased wages in the range of 60% to two-thirds of median hourly earnings.

The NLW currently stands at £8.21 per hour, or 58.9% of median hourly earnings. In response to the report, the Chancellor has pledged a more ambitious increase in the NLW such that, on current projections, it is set to reach £10.50 per hour by 2024. This announcement had the caveat that the increase would be subject to favourable economic conditions.

The Chancellor has also committed to expand the living wage to more young people by bringing down the age threshold for the NLW to cover all workers over the age of 21. The government is expected to issue a fuller response to the review in due course. This is also part of the government’s commitment to do more to end low pay.

Whilst many low paid employees will be buoyed by this news, it is important that employers with a significant proportion of staff who are paid the minimum wage rates pay, consider their medium term planning options.



 

Latest News

Updated calculator on calculating holiday entitlement
04/12/2019 - More...
The Government has published a revised holiday entitlement calculator, intended as a temporary replacement while the

Shared parental leave entitlements
03/12/2019 - More...
The shared parental leave and pay rules offer working parents’ far greater choice as to how they share the care of

Child Benefit tax charge
03/12/2019 - More...
The High Income Child Benefit tax charge could apply to you or your partner if either of your individual taxable

Search News


Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login