National minimum wage to increase as of April 1

Posted on 18 Jan 2016 by Callum Bentley

More than 70%of workers have said they will feel more positive for themselves and their families as a result of the introduction of the new National Living Wage, announced by the Chancellor at the Summer Budget.

The findings are part of a new Government survey which also shows that 59% of respondents will feel more motivated at work as a result of the increase in their pay packets.

Over a million workers in the UK aged 25 and over are set to directly benefit from the increase, which sees the current minimum rate of £6.70 increase by 50p.

Many will see their pay packets rise by up to £900 a year. This will be the largest annual increase in a minimum wage rate across any G7 country since 2009 in cash and real terms.

Chancellor of the Exchequer George Osborne speaks at St David's Hotel, Cardiff Bay during his visit to Cardiff (image courtesy of WalesOnline
Osborne said: “The new National Living Wage is an essential part of building the higher wage, lower welfare, lower tax society that Britain needs.”

Chancellor George Osborne commented: “The new National Living Wage is an essential part of building the higher wage, lower welfare, lower tax society that Britain needs and it’s great to see that over a million people will see their living standards boosted when this comes into force on April 1.

“Britain deserves a pay rise and this one-nation Government is making sure it gets one, helping more people have the security of a higher wage to provide for themselves and their families.”

Business Secretary Sajid Javid said: “The Government believes that Britain deserves a pay rise and our new National Living Wage will give a direct boost to over a million people. We are building a more productive Britain and giving families the security of well-paid work.

“This is a step up for working people, so it is important workers know their rights and that employers pay the new £7.20 from April 1 this year.”

The aims to support families across the country, who will see an increase in the personal allowance, taking the lowest paid out of tax, while free childcare will increase to 30 hours, helping household budgets stretch further.

Many UK companies have already pledged to pay at or above the new rate, including Morrisons; Lidl; National Express; and Ikea.

The Government is continuing to raise awareness to businesses to make sure they are ready to pay the new wage on April 1.

As part of this, it has published a four-step guide for businesses on the living wage website, asking firms to:

  1. Check you know who is eligible in your organisation
  2. Take the appropriate payroll action
  3. Let your staff know about their new pay rate
  4. Check your staff under 25 are earning at least the right rate of National Minimum Wage

HMRC will have responsibility for enforcing the new National Living Wage in addition to the National Minimum Wage from April 2016 and will take firm action where an employer fails to pay the correct wage.