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National Living Wage Vs National Minimum Wage Vs Living Wage.

Last week the Chancellor announced in the budget the introduction of a National Living Wage from next April. The NLW effectively introduces a new higher age band, as it will only apply to those people 25 and older.

The new NLW will require a minimum basic wage for most 25 years olds (apprentices and certain internships excepted) of £7.20, significantly up on the current NMW of £6.50. The current NMW was due to rise to £6.70 next October. The National Living Wage is due to become law, unlike the current ‘Living Wage’ which is a voluntary rate set by a lobbying group, but respected by many employers. The group still have some lobbying to do though, as their claim is for a living wage of £7.85 outside of London and £9.15 in the city.

Hopefully before long Osborne will align the dates of the NLW (April) and NMW (October) but for now we’re going to have to diarise two increases, and these are as follows:

From 1st October 2015 (National Minimum Wage):

  • For workers aged 21 and over the rate will increase 3% to £6.70
  • For workers aged 18 – 20, a similar 3% increase to £5.30
  • For 16 – 17 year olds, a 2% rise to £3.87.
  • For apprentices the rate increases from £2.73 to £3.30, a rise of 21%.

From 1st April 2016 (National Living Wage)

  • For workers age 25 and over: £7.20
  • For workers aged 21 and over: £6.70
  • For workers aged 18: 20: £5.30
  • For 16 – 17 year olds: £3.87.
  • For apprentices: £3.30

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