Protecting jobs and livelihoods was the focus of the 2021 Budget, which Chancellor Rishi Sunak recently revealed. Mr Sunak, speaking in the House of Commons on Wednesday 3rd March 2021, pledged even more support to workers and businesses to keep them afloat over the coming months as the UK begins to emerge from the coronavirus pandemic.
Part of the significant package of financial support was an increase to both the National Living Wage and the National Minimum Wage. As of 1st April this year, there will be a 2.2% increase to the National Living Wage, lifting it from £8.71 per hour to £8.91 per hour.
The National Living Wage previously only covered those aged 25 and over. However, the age threshold to qualify has now been extended to cover anyone aged 23 and over. This means over two million of the lowest-paid workers in the UK will benefit from this increase.
For those under the age of 23, the National Minimum Wage has also been boosted, to £8.36 for those aged 21-22 and £6.56 for 18–20-year-olds.
The rate of pay for apprentices has also increased by 3.6% and the Chancellor has further announced that the incentive payments to businesses for recruiting apprentices will be doubled to £3,000 for all new hires, of any age.
It’s worth noting that there weren’t any changes announced in regard to pensions, for both employer and employee contributions. Additionally, at present, there are no changes to employee national insurance rates.
We’ve outlined the wage increases by age in the table below:
|Age Range||Last Year||From April 2021|
|Apprentice Rate||£4.15||£4.30 (up 3.6%)|
|Age 16-17||£4.55||£4.62 (up 1.5%)|
|Age 18-20||£6.45||£6.56 (up 1.7%|
|Age 21-22||£8.20||£8.36 (up 2%)|
|Age 23 or over||£8.72||£8.91 (up 2.2%)|
How Can We Help?
The increase to both the National Minimum Wage and the National Living Wage will undoubtedly be positive news for many low paid workers across the UK, especially when 16–24-year-olds are amongst one of the hardest-hit brackets for redundancies over the last year.
However, there is a concern with regard to the employment cost increase that businesses now face. If you are unsure about how the wage changes will impact your business and need some help with your payroll, here at Azure Global, we can help.
Our team are ready and happy to help you through the ideal options for your business and put a plan in place for your business payroll needs.
Contact our friendly, knowledgeable staff today to discuss what we can do for you.