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Are you ready for the latest minimum wage rise?

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Are you ready for the latest minimum wage rise?

On 1 April 2018, the National Minimum Wage (NMW) and National Living Wage (NLW) will increase for all age groups.

Aimed at improving the prospects of young workers, the Chancellor Philip Hammond announced in the Autumn Budget that statutory wage rates would once again increase this year.

For those currently receiving the NLW, i.e. anyone over the age of 25, they will see their hourly rate increase from £7.50 to £7.83 an hour. This will mean that some full-time workers could be up to £600 a year better off.

For 21 to 24 year olds, the NMW will increase from £7.05 to £7.38, while 18 to 20 year olds will get a boost from £5.60 to £5.90.

Those below the age of 18 will see wages increase from £4.05 to £4.20, while apprentices will also see their NMW rate increase from £3.50 an hour to £3.70.

These new rates will boost the earnings of between 260,000 and 360,000 young workers directly, but will leave businesses with a larger payroll bill.

Further pledges to increase the NMW and NLW are expected in future, with the Government indicating that it still hopes to meet its pledge of raising the NLW to nearly £9 by 2020.

The majority of these rate rises beat the current rate of inflation of around three per cent, meaning that businesses may struggle to cover some of the costs.

Failing to pay the correct statutory wage could result in severe penalties, including the possibility of a business being publicly named and shamed.

Link: Changes to NMW and NLW


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