The 2021 National Minimum Wage increases were recently announced by the Chancellor of the Exchequer, Rishi Sunak, in the 2020 Spending Review on the 25th November 2020. The Chancellor announced that the National Living Wage will increase from £8.72 per hour to £8.91 per hour from the 1st April 2021, and that the age at which workers will start receiving the National Living Wage will fall from 25 years of age to 23 years of age from the same date. At the same time, the Chancellor also confirmed the new rates as regards the national minimum wage increases for younger workers, which will also come into force on the 1st April 2021. In setting the new rates for the minimum wage increases, the Chancellor accepted the recommendations made by the Low Pay Commission in full.
2021 National Minimum Wages Increases
The 2021 National Minimum Wage increases (including the new National Living Wage rate) that will apply from the 1st April 2021 will be as follows:-
- For workers aged 23 and over (i.e. the National Living Wage), the rate will increase from £8.72 to £8.91 per hour
- For workers aged 21-22 inclusive, the rate will increase from £8.20 to £8.36 per hour
- For workers aged 18-20 inclusive, the rate will increase from £6.45 to £6.56 per hour
- For workers aged 16-17 inclusive, the rate will increase from £4.55 to £4.62 per hour
- The apprentice rate will increase from £4.15 to £4.30 per hour
Low Pay Commission Recommendations
The new rates as regards the 2021 National Minimum Wage increases (including in relation to the National Living Wage) had been recommended by the Low Pay Commission (LPC), and the Government accepted those recommendations in full. The Chair of the Low Pay Commission (LPC), Bryan Sanderson, stated: "Recommending...[minimum wage increases] in the midst of an economic crisis coupled with a pandemic is a formidable task. The difficulty in looking forward even to next April is daunting. There are strong arguments concerning both low-paid workers – many performing critically important tasks – and the very real solvency risks to which small businesses are currently exposed. In these unprecedented conditions, stability and competence are prime requirements. Our value as a social partnership is to use the imperfect economic evidence to produce a recommendation...[regarding minimum wage increases] which is professionally researched and dispassionate. Most importantly, after much debate it has the support of the business, trade union and academic representatives who make up the Commission. We have opted for...prudent [National Minimum Wage increases and a National Living Wage rise] which consolidates the considerable progress of recent years and provides a base from which we can move towards the Government’s target over the next few years."
