The National Living Wage is the hourly rate for the minimum wage depending on your age and whether you are an apprentice. The government has vowed to introduce a new National Living Wage in 2020 which will see low-paid persons earn nearly a £1,000 more per year. But what exactly is the current National Living Wage and how is it changing in April?
What is the National Living Wage?
The National Living Wage is an obligatory minimum wage paid to workers in the UK aged 25 and above.
The payment first came into effect in April 2016 and was introduced by the then-Chancellor of the Exchequer George Osborne.
The wage began at £7.20 per hour in April 2016 and was projected to rise to at least £9 per hour by April 2020.
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What are the current National Living Wage rates?
The National Living Wage rates change every April, meaning they will alter in April 2020.
However, as of April 2019, the National Living Wage rates are as follows:
- Age 25 and over: £8.21 per hour
- Age 21 to 24: £7.70 per hour
- Age 18 to 20: £6.15 per hour
- Aged under 18: £4.35 per hour
- An apprentice: £3.90 per hour.
How are the National Living Wage rates changing in April 2020?
As of April 2020, the National Living Wage rates will be as follows:
Age 25 and over: £8.72 per hour
Age 21 to 24: £8.20 per hour
Age 18 to 20: £6.45 per hour
Aged under 18: £4.55 per hour
An apprentice: £4.15 per hour.
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In total, these above-inflation increases will affect almost three million people according to Boris Johnson.
However, the promise falls short of the pledge of £9 per hour made in 2015.
The current gap between the increases and the target made in 2015 means workers aged 25 and over are losing out on wages of around £1,600 each year, according to the government’s estimates.
But compared to 2019, a full-time worker aged 25 will receive a pay rise of £930 each year after April 2020.
Mr Johnson said: “Hard work should always pay, but for too long, people haven’t seen the pay rises they deserve.”
He added: “Our government will put a stop to that, giving nearly three million people from Edinburgh to Eastbourne a well-earned pay rise, including the biggest ever cash boost to the National Living Wage.”
The Conservative Party promised to increase the National Living Wage to £10.50 an hour over the next five years if “economic conditions allow”.
Chancellor of the Exchequer Sajid Javid said: “We want to end low pay and put more money in the pockets of hard-working families.
“This latest rise will mean that since we introduced the National Living Wage in 2016, the lowest paid will have had a wage increase of more than £3,600.”
What is the difference between the National Living Wage and Minimum Wage?
The National Living Wage was introduced in 2016, whereas the minimum wage is a wage rate released by the government is a negotiated settlement based on recommendations from trade unions and businesses.
Companies are not legally obliged to sign up to the real living wage but can become an accredited real living wage employer if they choose to do so.
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