National Living Wage to Increase by 5%

The National Living Wage, the statutory National Minimum Wage for individuals aged 25 and over, will rise by 4.9% from 1 April 2019, increasing from £7.83 to £8.21. The Low Pay Commission (LPC), which recommended this adjustment, estimates that approximately 2.4 million workers will benefit. Subject to sustained economic growth, the government aims for the National Living Wage to reach 60% of median earnings by 2020.

Chancellor’s Announcement

During the October Budget, Chancellor Philip Hammond stated: “From April [the National Living Wage] will rise again, delivering a full-time worker a £690 annual pay increase.” According to the Treasury, annual earnings for a full-time minimum wage worker have grown by over £2,750 since the NLW’s introduction in April 2016.

Other National Minimum Wage Rates from 1 April 2019

The government has accepted all LPC recommendations for age-specific rates. From 1 April 2019, the following rates apply:

• 21- to 24-year-olds: £7.70 per hour (+4.3%, from £7.38)
• 18- to 20-year-olds: £6.15 per hour (+4.2%, from £5.90)
• 16- to 17-year-olds: £4.35 per hour (+3.6%, from £4.20)
• Apprentices: £3.90 per hour (+5.4%, from £3.70)
• Accommodation offset: £7.55 per day (+7.9%, from £7.00)

Looking Ahead: LPC Remit for 2020 Onwards

In the coming months, the government will consult with the LPC and stakeholders on its remit beyond 2020.

Bryan Sanderson, Chair of the LPC, commented:

“The increase in the National Living Wage (NLW) to £8.21 in April 2019 will ensure a pay rise for the lowest-paid workers that exceeds both inflation and average earnings.

Over the past year, the labour market has continued to perform well and the economy, while subdued, has met the criteria of ‘sustained growth’ set out in our remit. We therefore recommended an increase in line with a path to 60% of median earnings by 2020. On current forecasts, the NLW will reach £8.62 in April 2020.

We also recommended real-terms increases to the National Minimum Wage (NMW) rates for younger workers and apprentices, as conditions for these groups remain strong. Although we opted for slightly smaller increases than last year due to softer labour market conditions for young people, next year’s rises will still be among the highest on record.”

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