National Living Wage set to increase in 2021

The National Living Wage and National Minimum Wage rates will increase again next year.

In April 2021, the National Living Wage will increase by 2.2 per cent from £8.72 to £8.91.

For the first time, the National Living Wage will be extended to 23 and 24-year-olds.

The reduction in the National Living Wage age threshold follows a review of the structure of Minimum Wage youth rates and recommendations made by the Low Pay Commission independent body in Autumn 2019.

From April 2021, the National Living Wage will be the statutory minimum wage for workers aged 23 and over. It currently applies to workers aged 25 and over.

Commissioners recommended smaller increases for workers under 23, in recognition of the risks to youth employment which the current economic situation poses, saying this is because younger workers ‘may be more exposed to employment risks from raising the National Minimum Wage’ than older workers.

For people aged 21-22, the rate will rise from £8.20 to £8.36.

Those aged between 18-20 the rate will rise from £6.45 to £6.56.

Those aged between 16-17 the rate will rise from £4.55 to £4.62.

The apprentice rate will rise from £4.15 to £4.30.

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.

“Our value as a social partnership is to use the imperfect economic evidence to produce a recommendation which is professionally researched and dispassionate.”

In April 2016, the National Living Wage was introduced with a target of 60% of median earnings by 2020, which the April 2020 uprating to £8.72 was forecast to reach.

The government’s current target is to make the NLW equivalent to two thirds of median earnings by 2024.

The Low Pay Commission will publish a full, detailed report, setting out its evidence and rationale for the increase in early December.