National living wage to increase to £7.83 an hour from April 2018

national living wage

Autumn Budget 2017: The national living wage will increase to £7.83 an hour from April 2018, Chancellor Philip Hammond has announced.

On the recommendation of the independent Low Pay Commission (LPC), the national living wage will increase by 4.4%, taking the current minimum level of pay for individuals aged 25 and over from £7.50 an hour to £7.83 an hour.

Other pay increases that will apply from April 2018 include a rise in the rate for 21-to-24 year olds by 4.7% from £7.05 to £7.38 an hour, the rate for 18-to-20 year olds by 5.4% from £5.60 to £5.90 an hour, a 3.7% increase in the rate for 16-to-17 year olds from £4.05 to £4.20 an hour and a 5.7% rise in the rate for apprentices from £3.50 to £3.70 an hour.

The LPC estimates the increases to the national living wage will benefit over two million workers.

Catrina Smith, partner in the employment team at Norton Rose Fulbright, said: “The Chancellor has said the national living wage will rise to £7.83 per hour from April 2018, which will be a welcome change for many and provide more security for the lowest-paid workers but will, of course, increase costs for employers.

“Of interest to all employers is the announcement that the government will publish a discussion paper in response to the Taylor Review on employment practices in the modern economy. It is hoped that any changes which result from the work done as a result leave us with an employment and tax system, which better suits modern ways of working and providing services”

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Alan Price, employment law director, at employment law consultancy Peninsula, added: “This early confirmation ensures employers have sufficient time to plan for the wage increases, both financially and administratively.

“Following an increased focus on enforcement in this area, failing to pass on these increases puts employers at risk of being publicly named and shamed or facing financial penalties. Even a one-day delay will create liability.”