National Living Wage is not the same as The Living Wage
To generate sufficient confusion among the public, the UK government have decided to roll out what they call National Living Wage. The source of the confusion is that this is different from The Living Wage, which has been put forward by the Living Wage foundation. Many employees, especially in the London area are now expecting their wages to rise above £9 (the figure put forward by the campaigners) in the spring and will instead receive just a 50p increase – the same as the rest of the country.
What is National Living Wage?
National Living Wage (NLW) is the measure put forward by the government. This means that from April 2016 anyone aged 25 and over will have to be paid a minimum wage of £7.20 per hour. This is a 50p increase from current National Minimum Wage (NMW) of £6.70. Workers aged 21-24 will remain on the NMW.
Younger workers have their own minimum wage rates: 18-20 year olds’ current rate is £5.30 per hour. The rate for 16 to 17 year olds is £3.87 per hour.
What is The Living Wage?
The Living Wage is an hourly rate set independently by the Living Wage Foundation and updated annually. It is calculated according to the basic cost of living in the UK and specified separately for London and the rest of the country. The current UK Living Wage is £8.25 and London Living Wage £9.40 an hour.
What does the future look like for minimum wage?
In April, over 2.5 million workers receive this pay rise. Going forward, The government’s objective is to have a National Living Wage of over £9 by 2020.
Many employers are concerned about how to fund the increase in wages and some 60,000 job losses are predicted as a result. Employers may opt to employ more workers under the age of 25 or simply be forced the cut the number of staff on their payroll.