Millions of workers across the UK are a matter of months away from a significant pay rise. This comes as the national living wage is set to increase next April.
The Low Pay Commission (LPC) has announced plans to raise the statutory rate to £12.10 per hour, up from the current £11.44 per hour for those aged 21 and over. This is in a bid to keep pace with inflation and ensure the rate remains above two-thirds of median earnings.
Following Labour’s instructions to the LPC to propose a rise that reflects the cost of living, the commission has indicated that a 5.8% increase is needed to match earnings growth, outstripping the 3.9% projected in March. As a result, the National Living Wage is expected to rise from £11.44 to £12.10 per hour in April 2025.
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The LPC has also confirmed that two-thirds of median earnings will now serve as a “floor” for future recommendations, although this estimate may be revised upwards if earnings growth exceeds expectations in 2024. The government is expected to confirm the National Living Wage increase during the Autumn Statement on October 30.
A spokesperson for the Department for Business and Trade (DBT) said: “We are changing the rules to put more money in working people’s pockets.”
They added, “But we have also been clear we need to consider the businesses who pay these wages, employment prospects and the impact on the wider economy, which is what we instructed the Low Pay Commission to do.”
The spokesperson further commented: “We believe a hard day’s work deserves a fair day’s pay and that’s exactly what our Make Work Pay plans will do working in conjunction with business.”
The government is considering overhauling the minimum wage structure by setting a single ‘genuine’ living wage to remove age-based differences, guaranteeing all individuals aged 18 and over are paid an equal minimum wage. The DBT, nevertheless, hasn’t specified when they anticipate implementing this reform.