April 4, 2016

The National Living Wage Increase is here

This post was written by: Ilinca Mardarescu

national living wage increase

The National Living Wage will come into affect on 1st April 2016. The new rate for any workers aged over 25 years will be £7.20 per hour.

The increase in National Minimum wage will immediately benefit over 1.3 million workers over the age of 25, nationwide. Yet a recent report says that 60,000 jobs could be lost as a result and a predicted 208,000,000 working hours will be reduced each year.

This bleak prediction comes from the Office for Budget Responsibility, an independent body whom released a large report on the UK economy that tallied alongside the Budget.  The report claims that these lost jobs and hours will undoubtedly hit those in lower paid jobs the hardest.

Although this pushes the UK further up in Worldwide graphs as one of the forerunners in a high and fair minimum wage; among countries such as France, Australia and New Zealand, It has still come under some criticism from the Foundation that brings us the widely used Living Wage.

So what is Living Wage?

The living wage has only existed in the capacity of being an informal benchmark for employers, and if said employer decided to not pay that amount there would be no legal repercussions. The rate is independently calculated according to the basic cost of living in the UK (this is through the Living Wage Foundation). The living wage offers a fair rate of pay for individuals to support themselves and their families.

The UK living wage is £8.25 an hour nationally and for London it is £9.40 an hour.

The difference between the proposed National Living Wage (NLW) and the Living Wage (LW) is that the NLW will be involuntary, and the LW is a benchmark for employers to voluntarily follow for the welfare and support of their employees.

The Living Wage foundation’s Director Sarah Vero has commented on Osbourne’s upcoming changes saying: “Today we are celebrating those 2,000 responsible businesses that are voluntarily paying the Living Wage to their staff. These employers are not waiting for Government to tell them what to do; their actions are helping to end the injustice that is in-work poverty in the UK now.”

Below is a chart of the various changes that will occur following this months changes. 

National Minimum Wage rates 2015/16
Age Minimum rate
Over 25 (NLW) £7.20 an hour
21-25 £6.70
18-20 £5.30
16-17 £3.87
Apprentices £3.30