Budget 2021: National Living Wage set to increase for millions next year from £8.91 to £9.50 an hour

The Treasury confirmed the move for all over-23s ahead of this week’s Budget

The National Living Wage will be increased from £8.91 an hour to £9.50 next year.

The Treasury confirmed the move for all over-23s on Monday ahead of Chancellor Rishi Sunak’s Budget this week.

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At a glance: 5 key points

  • The 59p hourly boost will mean a full-time worker on the living wage will get a pay rise of more than £1,000 per year. It will take effect from 1 April next year.
  • But critics questioned how much better off workers will be considering the Chancellor has already hiked National Insurance and cut Universal Credit.
  • The 6.6% hike is more than twice the current consumer price inflation rate of 3.1%.
  • While the National Minimum Wage applies to everyone of school-leaving age, the National Living Wage applies to everyone aged 23 and over.
  • For those aged 21 and 22, the minimum wage will rise from £8.36 an hour to £9.18, while the figure for apprentices will go from £4.30 to £4.81 per hour.

What’s been said

Mr Sunak said: “This is a Government that is on the side of working people.

“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.”

Background

There will be questions over whether the hike is enough to support families facing a cost of living crisis.

Shadow chief secretary to the Treasury Bridget Phillipson said the rise was an “underwhelming offer”.

Liberal Democrat Treasury spokeswoman Christine Jardine suggested that workers will be “bitterly disappointed” when they see “almost half of any rise snatched away by the Treasury before it even reaches their bank accounts”.

Mr Sunak increased National Insurance Contributions for workers by 1.25% to help pay for the NHS and social care, while he ended the £20-a-week Universal Credit uplift.

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