Chancellor Rishi Sunak recently unveiled his 2021 Budget that will see millions of workers across the country receive a pay rise.

Amongst the raft of additional financial support for both people and business that was announced on 3rd March as we continue to feel the impact of the pandemic, was the welcome news that 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 RangeLast YearFrom 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?

Whilst the increases to both the National Minimum Wage and the National Living Wage are welcome news for low paid workers across the UK, there are cost implications for employers who will need to factor in the increased labour cost to their operating costs.

If you are unsure about how the wage changes will impact your business and need some help with your payroll, we are here to help.

Our friendly, knowledgeable team are on hand ready to help talk you through the best options for you and your business.

Contact us today to discuss your payroll needs and what we can do for you.

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