Biggest ever increase to National Living Wage comes into effect

Economy & Politics | Employment & Skills | Latest News | National

Over 1.8 million workers earning the National Living Wage (NLW) will receive an additional £690 over the year from today, as the biggest ever increase to NLW comes into effect.

The National Minimum Wage (NMW) is also increasing. This includes £7.70 per hour for 21 to 24-year olds, providing an additional £580 over the year for full-time workers, and £6.15 for 18 to 20-year olds, providing full-time workers with an additional £455 over the year.

Taken together with changes to NLW, 2.1 million people will be receiving a pay increase from today, with workers in the retail and hospitality sectors due to benefit the most.

Business Minister Kelly Tolhurst said: “We are committed to making sure that UK workers get a fair day’s pay and the rise in the National Living and Minimum Wage, benefiting millions of people, delivers on this commitment.

“Since the National Living Wage was announced in 2015, it has helped protect the lowest paid – increasing faster than inflation and average earnings. Our minimum wage rates are among the highest in the world and, through our modern Industrial Strategy, we are determined to end low pay and workers get a fair day’s pay for a fair day’s work.”

Chancellor of the Exchequer, Philip Hammond, said: “This government is dedicated to increasing the wages of the lowest paid which is why we introduced the National Living Wage and have continued to increase the National Minimum Wage rates – all of which will rise again today and benefit millions of workers.

“This government is committed to raising productivity performance across the income spectrum, so that the wages of the lowest paid can increase sustainably over time. While the proportion of low paid jobs is now at its lowest level for 20 years, we are going further by asking Professor Arindrajit Dube, a world-leading expert in the field, to undertake a review of the international evidence of minimum wages on productivity and employment.”

The UK’s minimum wage is currently growing faster than other countries with similar or higher minimum wage, such as Belgium, France and Germany.


Justine Woolf, Director of Consulting at Innecto Reward Consulting – “The National Living Wage increase is good news for lower-paid workers, but it’s also putting pressure on wage differentials higher up the organisational ladder. A 4.9% rise is a significant pay pot to find, and this will jump to 9.6% next year if the government keeps its promise to hit £9 an hour by 2020.”

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