On 31 December, the Government announced that they have accepted the recommendation of the Low Pay Commission for increased National Living Wage (NLW) and National Minimum Wage (NMW) rates from April.
The new hourly rates, which will take effect from 1 April 2020, are:
National Living Wage (workers aged 25 and over): £8.72
National Minimum Wage:
- Workers aged 21 – 24: £8.20
- Workers aged 18 – 20: £6.45
- Workers aged 16 – 17: £4.55
- Apprentice rate: £4.15
These rates represent an increase across all categories, ranging from a 4.6 per cent increase for 16-17 year olds up to 6.5 per cent for 21-24 year olds. The Government states that this increase delivers on their goal originally announced in 2015 of raising the NLW to 60 per cent of median earnings.
In September 2019, the Chancellor pledged to further increase the NLW to a target of two-thirds of median earnings by 2024 (which would give an ultimate NLW of £10.50 per hour based on current forecasts). In addition, the Chancellor has also announced plans to expand the reach of the NLW to cover workers aged 23 and over from April 2021, and those aged 21 and over within five years.