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National Living Wage - Crowther Image

What is the National Living Wage?

This is an informal benchmark which indicates the minimum level an individual requires to earn to cover basic living costs.

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What is the Nation Living wage set at in 2016?

The National Living Wage was the big announcement in the first Budget of the 2015 Parliament. This, along with Auto enrolment, are the changes that are really making a financial impact on employers this year. The National Living Wage rate will start at £7.20 per hour from 1st April 2016.

Who will it affect?

The change brings about a 50 pence per hour increase to those employees who are aged 25 or over, are not in the first year of an apprenticeship and are currently being paid National Minimum Wage.  All employees under 25 should still be paid at least the correct minimum wage for their age group.

Of course, the change will also affect Employers, as the change could mean a significant increase in their weekly/month payroll costs.

Is it optional?

Not to be confused with the current Living Wage, the National Living Wage is a legally enforceable minimum rate of pay, and will be enforced as strongly as the current National Minimum Wage. This means if not enforced there will be back pay, fines, prosecution and of course naming and shaming.

Is it likely to increase?

Definitely! The government have made a promise to increase the figure every year; this means the first increase could come about as soon as October, when the other National Minimum Wage rates are reviewed.

A reminder of the current National Minimum Wage rates, since 1st October 2015.

25 and over* £7.20 p/h
21 and over £6.70 p/h
18 to 20 £5.30 p/h
Under 18 £3.87 p/h
Apprentice** £3.30 p/h

 

*Starting from 1st April 2016  **This rate applies to apprentices aged 16-18 and those aged 19 or over in their first year of an apprenticeship. All other apprentices are entitled to the minimum wage for their age group.

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