Two million people just woke up richer.
As of today, the wage people over 25 must get paid is increasing by 33p – from £7.50 to £7.83.
The rise is a 4.7 percent increase on last year, with the Treasury saying it will leave workers on basic pay and full-time hours, £600 better off a year (or £50 per month).
If you are younger, your wage will have also gone up. If you are 18-20, you must now be paid £5.90 and if you are 21-24, you should be paid £7.38. Whilst the mininum wage for under 18s is £4.20 and apprentices (under 19 or in their first year) must be paid £3.70.
It is believed that more than 2 million workers are to receive a pay rise as a result of the move.
Chancellor Philip Hammond said: “By increasing the National Living Wage, cutting income tax and freezing fuel duty for the eighth year running, we are boosting living standards for millions of people, giving them more choice over how to use their pay packet and building an economy that works for everyone.”
However, the Living Wage Foundation estimates the new minimum stands at nearly £1,800 less than the ‘real living wage’, which it works out based on what people need to spend on basic living costs for housing, transport, childcare and food. The foundation believes people should be paid at least £8.75 per hour.
Tess Lanning, Director of the Living Wage Foundation, said: “We welcome any steps to close the gap between the government minimum and the wage employees and their families need to get by. But over 5.5 million workers still earn less than the real Living Wage calculated according to what people need to live.
“For these people, this is the difference between struggling to make ends meet and being able to cover the basics, from decent meals to heating bills, to the cost of a birthday cake for their children. The only way we will fully close the gap is for more businesses and organisations to voluntarily choose to pay the real Living Wage, not just the government minimum.”
TUC general secretary Frances O’Grady said in-work poverty remained a “huge problem” despite the increase.
She added: “It’s good that the minimum wage is rising above inflation, but it needs a serious boost in the coming years. We need to get it to £10 an hour as soon as possible. At the moment it’s not even on track to reach £9 an hour by 2020 – the amount promised by George Osborne.”
The minimum wage was a key issue at the last General Election, with Labour’s Shadow Chancellor John McDonnell pledging a national minimum wage of £10-an-hour if his party was elected.
