National living wage to increase nearly 5% from April 2019

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The national living wage, the statutory national minimum wage for those aged 25 and over, will increase 4.9% from 1 April 2019, from £7.83 to £8.21.

The Low Pay Commission (LPC), which recommended the increase, estimated that the increase will benefit around 2.4 million workers. Subject to sustained economic growth, the government’s aim is for the national living wage to reach 60% of median earnings by 2020.

Announcing the increase in the Budget in October, the chancellor Philip Hammond said: “From April [the National Living Wage] will rise again, handing a full-time worker a £690 annual pay increase.”

The Treasury says the annual earnings of a full-time minimum wage worker will have increased by over £2,750 since the introduction of the NLW in April 2016.

The government accepted all of the LPC’s recommendations for the other national minimum wage to apply from 1 April 2019:

  • increasing the rate for 21- to 24-year-olds by 4.3% from £7.38 to £7.70 per hour;
  • increasing the rate for 18- to 20-year-olds by 4.2% from £5.90 to £6.15 per hour;
  • increasing the rate for 16- to 17-year-olds by 3.6% from £4.20 to £4.35 per hour;
  • increasing the rate for apprentices by 5.4% from £3.70 to £3.90 per hour; and
  • increasing the accommodation offset by 7.9% from £7.00 to £7.55.

In the coming months, the government will consult with the LPC and others on the LPC’s remit for 2020 onwards.

Bryan Sanderson, chair of the LPC, said: “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.”

On current forecasts, the LPC estimates that the NLW will reach £8.62 in April 2020.

He added: “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.”

 

Article originally published 29 October 2018, updated 20 February 2019

18 Responses to National living wage to increase nearly 5% from April 2019

  1. Avatar
    D Tranter 7 Feb 2019 at 12:59 pm #

    I love this but in smaller businesses with limited income how do they expect it to be kept being paid, no help for business just demands , in most cases we are only just surviving and would love to pay more, but with the wages rising so do other things like food etc so everyone can keep up so no one is better off, way to kill off everything

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      Sausage n egg 10 Feb 2019 at 7:52 am #

      You are lucky you have workers with an attitude like that….

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      Slave 12 22 Feb 2019 at 4:17 pm #

      Why don’t you go back to the good old days and get slaves instead..? Like your workers have to survive and pay all their overheads too on peanuts. Wanna pay peanuts – employ monkees as they say… The trouble nowadays is employers want more and more work from employees for peanuts and don’t even appreciate the staff.. there’s two sayings:

      1. anyone can get any staff but keeping good staff is different matter.
      2. look after your staff and your staff will look after your business.

      Nowadays business only see employees as a number and not a person only interested in profit.. too many chiefs doing jack and not enough indians..

      • Avatar
        j phillips 13 Mar 2019 at 10:37 am #

        correct, they will continue to hire the least amount of staff, for peanuts, and the quality of work will decline, and the good staff wil leave.

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        Anne 18 Mar 2019 at 2:51 pm #

        We are a small supported living service for adults with a disability. We are paid by the council per hour of support. We have had no increase to that rate for what will be 4 years in April. In 2014 the govt (without warning) made businesses responsible for sick pay–which was a new cost. Then pensions were introduced and employers contributions have gone up every year. Thats before the increases in minimum wage.
        We have always paid well above minimum wage but the fact that we are being squeezed so badly means that we are now not far above it. We have always had a big response to any job adverts but now people can earn as much doing far less stressful jobs in more sociable hours, so we are starting to struggle.
        We certainly dont see our staff as ‘monkeys’ but as highly skilled, dedicated and very valued professionals.
        And no I am not making massive profits myself-I work very long hours for just under minimum wage!

  2. Avatar
    Angry 1 Mar 2019 at 9:36 pm #

    Slave 12 and Sausage n Egg, you’re talking through your backside!

    If you were working for less than half of the living wage and your lowest paid worker earns far more than you and can buy a bigger house etc, then you might understand what D Tranter is talking about. Not all employers are rich. An awful lot of small business owners are living hand to mouth just to keep the business going. I work 7 days a week, 18 hours a day and still earn less than any member of my staff. They are not the ones worrying about how they are going to pay the wage bill or the huge increase in rates, never mind the massive VAT bill.
    i do the same work as my staff as well as the managerial stuff.

    • Avatar
      Maserati65 6 Mar 2019 at 8:18 am #

      Angry, think you need to look at your business model.
      Working a 126hr week and earning less than your staff is
      not only bad for your welfare but also bank balance.
      Think you need to mange your time more effectively, just saying.

    • Avatar
      Ben 6 Mar 2019 at 1:35 pm #

      Then why don’t you quit the business and go for employment somewhere else? By working 18 hours a day you could be a rich man already. And I would not believe that somebody working for minimum wage would afford to buy ANY house… There is no bank who would give them credit and usually what they earn is just enough for rent and basic pleasures like food and train tickets…

    • Avatar
      Mac 13 Mar 2019 at 12:33 pm #

      If it’s that bad as you say give up your business and get a job with a better salary,simples.

    • Avatar
      shaun 13 Mar 2019 at 3:07 pm #

      you should probably stop running your business as it doesn’t sound very profitable at all..

  3. Avatar
    Maserati65 6 Mar 2019 at 8:14 am #

    As an employer in the cleaning industry for over 18 yrs, I also agree about paying staff a living wage or indeed more. The irony is to be able to do this, I must charge more for the services we provide, and guess what ….. people, busineses don’t want to pay more. Alway the cheaper option.
    The hypocrisy is unbelievable yet industry’s like mine that notoriously pay the minimum wage
    or less get slated for this. I would be delighted to pay my staff £9 or £10 per hour but guess what,
    It comes at a cost to the clients. Get real people 😡

    • Avatar
      Tori 13 Mar 2019 at 8:45 am #

      Exactly my problem. I run a Professional dog walking business, we tick all the boxes, insurance, BS , comprehensive training for the dog walkers, team leaders for support and backup, however, all this comes at a cost, including now, VAT. However, people would rather pay cash to the unemployed, uninsured person to walk their dog cheaper while claiming their Job seekers than us. We will be out of business before long and the dogs will either be left at home for long working days or out with uninsured people who we often mop up after now.

  4. Avatar
    Tori 13 Mar 2019 at 8:39 am #

    Increasing the minimum wage will mean increase in the income and the equivalent or more increase in the cost of living, however, the tax threshold will not increase by as much, so it will also mean an increase in tax that we pay, meaning the net money we receive will not increase by as much as the cost of living!

  5. Avatar
    sandy 13 Mar 2019 at 8:57 am #

    wow an increase of 38p! what can you buy for that

    • Avatar
      Allan Davidson 13 Mar 2019 at 4:33 pm #

      Sandy, 38p on base rate in some businesses is multiplied by OT Rates. Say 38p on a 40 hr week, + 10 hours at 1.5 and 5 at 2 based on a 52 week year = £1,814 per year. Say an additional cost to employer of 20% for ENI and WTD = £1,541. Say a small business has 60 staff on that rate the annual wage cost increases by £92,476 per year. Prices will not increase in line with the rise so, say the business made £80k profit last year and is unable to raise prices, that business, employing 60 staff will go bust and those staff will be out of job.

  6. Avatar
    Ricky Shiels 13 Mar 2019 at 1:47 pm #

    I like the LPC’s projection that NLW will be £8.62 by April 2020 in spite of the Tory manifesto of 2016 promising £9.00 by 2020.
    This Government must think we have short memories.

  7. Avatar
    Paul 16 Mar 2019 at 1:13 am #

    We are a spending nation, pay more and people will spend more putting money back into businesses.

    • Avatar
      Anne 18 Mar 2019 at 2:56 pm #

      Yes, with pay rises people will spend more in shops, restaurants, leisure activities etc. But that doesnt help services for people with a disability. Councils wont give us more!

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