National Living Wage and National Minimum Wage rates to increase.December 5, 2016 // No Comments
The government has accepted the recommendation of the Low Pay Commission (LPC) for new to apply from April 2017. These include a 4.2 per cent increase in the National Living Wage (NLW), the rate for workers aged 25 and over, from £7.20 to £7.50.
LPC Chair Sir David Norgrove said:
The LPC is required to make recommendations on the pace of increase in the National Living Wage such that it reaches 60 per cent of typical earnings by 2020, subject to sustained economic growth. The key challenge this year has been uncertainty in relation to the economic outlook following the decision to leave the EU, and whether we needed to go more slowly than our previous intention of straight line increases in the relative value of the rate.
The 4.2 per cent increase keeps the National Living Wage on course for the 2020 goal. The recommendation was a finely balanced decision. On the one hand, it is a significant increase at a time of average pay growth of around 2 per cent and should help protect low-paid workers from the higher inflation likely to result from the depreciation of sterling. On the other hand, it is lower than we previously projected and should help manage risks to employment.