In a groundbreaking move, Chancellor Jeremy Hunt has announced a significant pay increase for nearly 3 million low-paid workers in the UK. Starting next spring, these workers will benefit from a wage increase of almost 10%, with the national living wage set to rise to £11.44 per hour. This translates to an annual wage increase of £1,800 for full-time workers. The move is a direct response to the 2019 Conservative pledge to eradicate poverty pay in the country.
The decision to accept the recommendation of the Low Pay Commission (LPC) marks the largest ever cash increase in the national minimum wage. The LPC is the advisory body responsible for guiding the government on setting the minimum wage in the UK. By implementing this pay hike, the government aims to address the pressing issue of a cost of living crisis induced by inflation, which peaked at a staggering 11.1%, the highest in four decades.
To further expand the reach of the national living wage, eligibility will be extended by lowering the age threshold from 23 to 21. This means that 21-year-olds will experience a significant 12.4% pay increase, from £10.18 to £11.44 per hour, resulting in an annual boost of nearly £2,300 for full-time employment. Additionally, younger workers between the ages of 18 and 20 will receive a pay rise to £8.60 per hour, equivalent to a £1.11 increase.
Acknowledging the impact of this decision, Chancellor Hunt emphasized, “Next April, all full-time workers on the national living wage will receive a pay rise of over £1,800 per year. This will put an end to low pay in our country, fulfilling our manifesto promise.” He also praised the success of the national living wage since its introduction in 2016, noting that it has played a crucial role in reducing the number of individuals earning low wages by 50% since 2010.
FAQ:
Q: How many workers will directly benefit from the pay increase?
A: The Department for Business and Trade estimates that 2.7 million workers will directly benefit from this increase.
Q: What age group will now be eligible for the national living wage?
A: The age threshold for the national living wage has been lowered from 23 to 21, extending its reach to 21 and 22-year-olds.
Q: Will there also be a pay increase for younger workers?
A: Yes, workers aged between 18 and 20 will receive a pay boost to £8.60 per hour, resulting in a £1.11 hourly pay increase.