Autumn Budget: National living wage set to rise to £9.50

In his Budget speech on 27 October 2021, the Chancellor has announced a 6.6% increase to the National Living Wage (‘NLW’) as well as increases to the National Minimum Wage (‘NMW’) rates. During the statement, the Chancellor said, ‘This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament.’

The changes will come into force from 1 April 2022 and will mean that;

• the NLW will rise by 6.6% from £8.91 to £9.50 per hour
• the rate for 21 to 22 year olds will increase by 9.8% from £8.36 to £9.18 per hour
• the rate for 18 to 20 year olds will increase by 4.1% from £6.56 to £6.83 per hour
• the rate for 16 to 17 year olds will increase by 4.1% from £4.62 to £4.81 per hour
• the rate for apprentices will increase by 11.9% from £4.30 to £4.81 per hour

In his speech, the Chancellor estimated that the change to NLW would mean that a full-time worker, working 35 hours per week, would take home an extra £1,000 per year.

Aspire Comment:

Whilst the increase in NMW and NLW rates will be good news for workers, it will present further cost implications for employers who will need to factor in the increased cost of labour supply either by lowering profit, necessitating further cost saving initiatives, or increasing their charges.

If you are concerned about your compliance with the NLW/NMW, please contact Aspire on 0121 445 6178 or email enquire@aspirepartnership.co.uk to discuss how we can identify any risk areas within your company.