Millions of low-paid workers in the UK are to get a pay rise of 4.1% next year, with the national living wage rising to £12.71 an hour from April for over-21s.
The minimum wage for 18- to 20-year-olds will increase by 8.5% to £10.85 an hour, narrowing the gap with older workers as part of government’s commitment to “raise the floor” on wages for all workers.
Commenting on the news Ben Harrison, Director, Work Foundation at Lancaster University – a leading think tank for improving working lives in the UK said
“A rise of 4.1% in the National Living Wage has the potential to help ease the cost of living pressures facing low paid workers, but it remains far from certain they will feel the benefit in their pockets.
“The reality is that sustained price rises risk eroding the financial benefits workers stand to gain. Work Foundation analysis shows that low paid workers in particular are feeling the brunt of financial pressures, with only 42% of those earning less than £25,000 stating pay is keeping up with the cost of living.
“It’s ultimately critical that the rate of inflation returns to the Bank of England target in 2026 if this is to represent a significant real terms pay rise for the 2.4 million low paid workers who will receive it.
New National Minimum Wage rate for 18 to 20-year-olds narrows earnings gap
“An 8.5% increase in the youth rate of the National Minimum Wage for 18-20 year olds represents a big step towards the Government’s aim of equalising the minimum wage for all age groups.
“The rise to £10.85 per hour could be critical in ensuring that work pays for more young people. At a time when nearly a million young people are not in employment, education, or training, ensuring that being in work offers more financial security could significantly improve their living standards and provide a critical boost to the UK workforce.
“However, it’s important that Government monitors the impact of these rises on the availability and security of entry level jobs. In particular, the new Fair Work Agency must prioritise ensuring employers don’t seek to circumvent increases to the national minimum wage via a shift to more precarious forms of employment such as platform and gig economy roles.”
