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2019 Budget: National Living Wage set to increase by almost 5%

Oct 31, 2018

The National Living Wage, which is the statutory minimum wage for those aged 25 and over, has to rise to £8.21ph from April 2019 – which means an additional £690 annually for low paid workers.

The Low Pay Commission (LPC), which recommended the increase, have anticipated that the increase will see almost 2.4 million workers throughout the UK better off.

In addition, the Government have accepted all of the LPC’s recommendations for the following NMW rates:

• 21- to 24-year-olds will increase by 4.3% from £7.38 to £7.70 per hour;
• 18- to 20-year-olds will increase by 4.2% from £5.90 to £6.15 per hour;
• 16- to 17-year-olds will increase by 3.6% from £4.20 to £4.35 per hour;
• Apprentice rates will increase by 5.4% from £3.70 to £3.90 per hour; and
• The accommodation offset will increase by 7.9% from £7.00 to £7.55.

“The increase in the national living wage (NLW) to £8.21 in April 2019 will ensure a pay rise for the lowest-paid workers that exceeds both inflation and average earnings.

“Over the past year, the labour market has continued to perform well and the economy, while subdued, has met the criteria of ‘sustained growth’ set out in our remit for the NLW. We therefore recommended an increase in line with a path to 60 per cent of median earnings by 2020.” Said Sanderson, who is the chair of the LPC.

He added further: “We recommended real-terms increases to the national minimum wage (NMW) rates for younger workers and apprentices, as the labour market conditions for these groups remain strong. These rates will continue to rise faster than both inflation and average earnings.

“We opted for smaller increases than we recommended last year because of slightly weaker labour market conditions for young people, combined with insufficient evidence to fully understand the impact of the largest increases in a decade implemented in April of this year. However, next year’s will still be some of the highest increases on record.”

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Employment Law Updates

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Employment Law, Employment Law Advice, Employment Law Advices for Employers, Employment Law Update, Employment Status, HR Advice, National Living Wage, National Minimum Wage