The Chancellor of the Exchequer, Philip Hammond, recently announced in the 2018 Budget that the National Living Wage will increase from £7.83 per hour to £8.21 per hour from the 1st April 2019. At the same time, the Chancellor also announced the new rates as regards the national minimum wage increases for younger workers, which will also come into force on the 1st April 2019. Furthermore, the Government has again accepted the recommendations made by the Low Pay Commission in relation to the new rates.
National Minimum Wage Increases
The National Minimum Wage increases that will apply from the 1st April 2019 will be as follows:-
- For workers aged 21-24 inclusive, the rate will increase from £7.38 to £7.70 per hour
- For workers aged 18-20 inclusive, the rate will increase from £5.90 to £6.15 per hour
- For workers aged 16-17 inclusive, the rate will increase from £4.20 to £4.35 per hour
- The apprentice rate will increase from £3.70 to £3.90 per hour
The rate of the National Living Wage for those aged 25 and over will increase from £7.83 to £8.21 per hour from the 1st April 2019.
Low Pay Commission Recommendations
The new rates for the national living wage and the national minimum wage increases 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: “I am pleased that the Government has again accepted in full the Low Pay Commission’s recommendations for future minimum wage rates. The increase in the National Living Wage (NLW) to £8.21 in April 2019 will ensure a pay rise for the lowest-paid workers that exceeds both inflation and average earnings. Over the past year, the labour market has continue to perform well and the economy, while subdued, has met the criteria of ‘sustained growth’ set out in our remit for the NLW. We therefore recommended an increase in line with a path to 60 per cent of median earnings by 2020. On current forecasts, we estimate that the NLW will reach this target at a rate of £8.62 in 2020. We recommended real-terms increases to the National Minimum Wage (NMW) rates for younger workers and apprentices, as the labour market conditions for these groups remain strong. These rates will continue to rise faster than both inflation and average earnings. We opted for smaller increases than we recommended last year because of slightly weaker labour market conditions for young people, combined with insufficient evidence to fully understand the impact of the largest increases in a decade implemented in April of this year. However, next year’s will still be some of the highest increases on record.”