National Living Wage To Increase In April 2020

National living wage to increase in April 2020
The national living wage paid to workers aged 25 and over will rise from £8.21/hour to £8.72/hour from April, the Government has announced.

The 51p increase represents a rise of 6.2% – over four times the rate of inflation, which stood at 1.5% in November. It will mean a pay rise of around £930 per year for a full-time worker earning the national living wage.

Workers aged under 25 will also see a rise in their minimum wage, of between 4.9% and 6.4% depending on their age.

What is the national living wage?

Introduced in July 2015 by the then Chancellor George Osborne, the compulsory national living wage is the lowest wage which can legally be paid to employees aged 25 or over. It is adjusted every April.

It's higher than the compulsory national minimum wage, which applies at varying rates to employees aged under 25 (as the table below illustrates) and is also rising.

The 'national living wage' is different from the 'real living wage', which is the amount calculated by campaign group the Living Wage Foundation as the minimum pay workers and their families need to live.

The 'real living wage' is currently £9.30 across the UK and £10.75 in London, for anyone aged over 18.

In September, Chancellor Sajid Javid pledged to increase the 'national living wage' to be two thirds of 'median earnings' by 2024 (that's an average, which is the middle amount of what workers earn – ie, half of workers earn less than it and half more).

He also plans to expand the national living wage to cover workers aged 23 and over from 2021, and aged 21 and over within five years.

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