The national living wage or minimum wage is set to rise by 6.2 per cent, this will see almost 3 million UK workers receive a pay rise, which the Government has called “the biggest cash increase ever”.
From April 2020, the National Living Wage for those 25 and over will increase to £8.72 per hour. The National Minimum Wage for 21 to 24-year-olds will increase by 6.5 per cent to £8.20. For 18 to 20-year-olds, they will see a rise of 4.9 per cent to £6.45 and under 18s will see 4.6 per cent increase to £4.55. Apprentices will see an increase of 6.4 per cent to £4.15.
The minimum wage for over 25-year-olds was remodelled as the national living wage in 2016. The Treasury has said that the increase equates to an annual increase of £930.
The rise in the National Living Wage is four times the rate of inflation. Boris Johnson, Prime Minister of the UK said:
Hard work should always pay, but for too long people haven’t seen the pay rises they deserve.
The Trade Union Congress (TUC) believes these pay rises are long overdue and that the minimum wage should hit £10.
Frances O’Grady, general secretary of the TUC said:
Workers are still not getting a fair share of the wealth they create, and in-work poverty is soaring as millions of families struggle to make ends meet. No more excuses, working families need a £10 minimum wage now, not in four years’ time.
However, some businesses have said that an increase in wages will put heightened pressure on companies and that the Government should reduce other costs.
Hannah Essex, co-executive director of the British Chambers of Commerce (BCC) said:
Many companies have struggled with increased costs in a time of great economic uncertainty.
Raising wage floors so far above the rate of inflation will pile further pressure on cash flow and eat into training and investment budgets.
For this policy to be sustainable, government must offset these costs by reducing others.