The National Living Wage will increase from the 1st April from £7.83 to £8.21 per hour. This is a statutory national minimum wage and applies to all those aged 25 and over. There are various levels of National Living Wage which were recommended by the Low Pay Commission (LPC), all of which were accepted by the government and announced by Philip Hammond, the chancellor, in Budget in October 2018.
As from the 1st April the new National Living Wage rates will be as follows:
- 25+ increases by 4.9% from £7.83 to £8.21
- 21- to 24-year-olds increases by 4.3% from £7.38 to £7.70 per hour
- 18- to 20-year-olds increases by 4.2% from £5.90 to £6.15 per hour
- 16- to 17-year-olds increases by 3.6% from £4.20 to £4.35 per hour
- For apprentices the rate increase by 5.4% from £3.70 to £3.90 per hour
These increases are part of a series of increases which the Low Pay Commission predicts will see the National Living Wage increase to £8.62 in April 2020.
We also see a statutory increase in pension contributions effective 1st April 2019; a minimum 3% employer and 5% employee, or workplace pensions as the payments have become better known.
The changes to the rates on 1st April also see a reduction in the gap between the National Living Wage and the ‘Real Living Wage’. It is also important to differentiate between the two. The National Living Wage is a mandatory minimum wage that employers have to pay staff; as of 1st April 2019 it will be £7.70 per hour for under 25s and £8.21 for those over 25. The Real Living Wage was independently calculated and the amount of £9.00 per hour was determined as the minimum amount that people need to get by, it was then adopted by the Government as a target minimum wage to be reached by 2020.
At Allstaff we are starting to see employers accepting the independent findings that suggest the higher amount of £9.00 per hour is the minimum needed to get by. Provided businesses meet the criteria set out by Poverty Alliance Scotland and Living Wage Scotland they can be awarded accreditation as a ‘Living Wage Employer’. The accreditation enables them to use the Living Wage Employer mark which signifies that we have accepted our responsibility as an employer to pay what has been calculated as the Real Living Wage.
If you have any questions relating to the new National Living Wage or the Real Living wage please feel free to contact us in the Glasgow or Paisley offices, we will be happy to assist in any way we can.
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