Minimum Wage and National Living Wage rates increase as new 2021 rules take effect | Personal Finance | Finance

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April has arrived, and this means a whole host of financial changes are coming into effect. From benefits rises to price hikes, there are many ways in which people may be affected – both positively and negatively.

This works out as an increase of nearly nine percent for a 23-year-old or 24-year-old who was on the National Minimum Wage for over 21s.

It means they’ll get 71 pence more per hour from this month.

That’s according to Paul Holcroft, managing director at HR Consultancy Croner, who pointed out their pay would increase by 8.7 percent.

Paul Holcroft, managing director at HR consultancy Croner, said: “The impact of this is that those aged between 23 and 25 currently on the minimum wage rate for 21 to 24 year-olds will see a pay rise of nearly nine percent, which employers will need to facilitate,” Personnel Today reports.

How is National Minimum Wage changing?

National Living Wage

Rate from April 2020 – £8.72

Rate from April 2021 – £8.91

Increase – 2.2 percent

21-22 Year Old Rate

Rate from April 2020 – £8.20

Rate from April 2021 – £8.36

Increase – 2.0 percent

18-20 Year Old Rate

Rate from April 2020 – £6.45

Rate from April 2021 – £6.56

Increase – 1.7 percent

16-17 Year Old Rate

Rate from April 2020 – £4.55

Rate from April 2021 – £4.62

Increase – 1.5 percent

Apprentice Rate

Rate from April 2020 – £4.15

Rate from April 2021 – £4.30

Increase – 3.6 percent

Accommodation Offset

Rate from April 2020 – £8.20

Rate from April 2021 – £8.36

Increase – 2.0 percent.

The new rates were announced back in November 2020, and confirmed in the Spring Budget last month.

The announcement confirmed the Government had accepted in full the recommendations made by the Low Pay Commission at the end of October.

Bryan Sanderson, Chair of the Low Pay Commission, said: “Recommending minimum wage rates 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 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 a prudent increase 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.”

These rates, including the National Living Wage differ to the real Living Wage rates.

The real Living Wage is a voluntary UK wage rate which is based on living costs.

The Living Wage Foundation announced the 2020/21 rates in November 2020, and all employees receiving the Living Wage should receive the new rate by May 9, 2021.

The Living Wage is £9.50 per hour across the UK, and £10.85 for those in London.



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