Millions of UK workers receiving pay rise after boost in national living and minimum wages

By Edward Bishop

money £20 and coinsOver 2 million workers in the UK will receive a pay rise today following National Living Wage and National Minimum Wage increases.

The National Minimum Wage (NMW) is the minimum pay per hour most workers under the age of 25 are entitled to by law. The government’s National Living Wage (NLW) is the minimum pay per hour most workers aged 25 and over are entitled to by law.

The hourly rate for workers aged 25 has increased by almost 5% to £8.21 an hour, up from £7.83. The hourly rate for 21 to 24-year-olds has increased from £7.38 to £7.70, while the hourly rate for 18 to 20-year-olds has increased from £5.90 to £6.15.

According to the government, full-time workers receiving NLW will be more than £2,750 better off a year compared to 2015, when the rate was first announced.

“Over 2 million workers in the UK will receive a pay rise today following National Living Wage (NLW) and National Minimum Wage (NMW) increases,” the government said in a news release.

Workers in the retail and hospitality sectors are expected to benefit the most from the NLW and NMW increases. Women are also expected to benefit the most from the wage hike given that they hold the majority of minimum wage jobs.

The new rates are:

Age

2019-20 (new rate)

2018-19 (previous rate)

25 and over

£8.21

£7.83

21 to 24

£7.70

£7.38

18 to 20

£6.15

£5.90

Under 18

£4.35

£4.20

Apprentice

£3.90

£3.70

Source: Gov.uk

The government says that this is the biggest ever increase to the NLW to come into effect.

Business Minister Kelly Tolhurst said:

“We are committed to making sure that UK workers get a fair day’s pay and the rise in the National Living and Minimum Wage, benefiting millions of people, delivers on this commitment. Since the National Living Wage was announced in 2015, it has helped protect the lowest paid – increasing faster than inflation and average earnings.

“Our minimum wage rates are among the highest in the world and, through our modern Industrial Strategy, we are determined to end low pay and workers get a fair day’s pay for a fair day’s work.”

Chancellor of the Exchequer, Philip Hammond, said:

“This government is dedicated to increasing the wages of the lowest paid which is why we introduced the National Living Wage and have continued to increase the National Minimum Wage rates – all of which will rise again today and benefit millions of workers.

“This government is committed to raising productivity performance across the income spectrum, so that the wages of the lowest paid can increase sustainably over time. While the proportion of low paid jobs is now at its lowest level for 20 years, we are going further by asking Professor Arindrajit Dube, a world-leading expert in the field, to undertake a review of the international evidence of minimum wages on productivity and employment.”

Low Pay Commission Chair Bryan Sanderson commented:

“We are pleased that millions of workers across the country will see an above-inflation pay rise as a result of today’s minimum wage increases, which follow the recommendations the LPC made in the autumn. Today is particularly significant as it also marks 20 years of the National Minimum Wage. Over the last 20 years the NMW and more recently the NLW have achieved their goal of raising pay without significant negative effects on employment.”