The National Living Wage is set to rise to £7.20
From April 2016, a new National Living Wage of £7.20 an hour will be introduced with the hope to rise to over £9 an hour by 2020.
The new National Living Wage will only apply to those aged 25 and over, with the existing National Minimum Wage to continue for those aged between 21 and 24.
Those currently on the National Minimum Wage will see an increase of 70p an hour based on the current rate and 50p an hour compared to the planned October 2015 increase. For Example, by 2020, an individual aged over 25, working 35 hours a week and previously earning the minimum wage will see their gross wages increase by around £5,200 in monetary terms, which is great.
Why is the National Living Wage in the United Kingdom increasing?
The National Living Wage is being introduced because there are more people in the UK on low pay compared to other advanced economies.
Around one in five UK workers is low paid, compared to an average of only one in six among the other 33 Organisation for Economic Co-operation and Development (OECD) countries
I have heard about the National Living Wage before
This has previously been used by employers on a voluntary basis, as of April 2016 it will be made compulsory.
The National Living Wage has been calculated independently and updated annually according to the basic cost of living.
Orbital Recruitments Helen Younger comments “We have already had lots of positive feedback from our workforce who are looking forward to the proposed increase in the National Living Wage and the economic stability this will create”
The current Living Wage for London is £9.15 an hour, lower than what the Government says its National Living Wage will be by 2020. Elsewhere the rate is £7.85 an hour, more than what has been proposed in the Budget.
What is the difference between the National Living Wage and the National Minimum wage?
It will effectively replace the existing minimum wage for everyone aged 25 and above.
The wage will ensure everyone aged 25 and over receives £7.20 an hour from next April, with the figure rising to £9 by 2020.
At the moment, the national minimum wage is £6.50 and applies to everyone aged 21 and over.
Orbital Recruitment are a supplier of personnel for both temporary and permanent vacancies to companies throughout the UK and are a specialist in delivering bespoke recruitment solutions tailored to companies needs. Find out more about the recruitment services we offer.