What is the difference between the National Living Wage and the National Minimum Wage?
The Government’s National Living Wage was introduced on 1 April 2016 for all workers aged 25 and over, and is set at £7.20 per hour. The National Minimum Wage is now the minimum pay per hour for those under the age of 25.
The rate of the National Minimum Wage will depend on the worker’s age and if they are an apprentice.
The National Minimum Wage rates will increase from 1 October 2016 as a result of the Government accepting recommendations for the new rates from the Low Pay Commission.
What are the new rates for the National Minimum Wage?
The new National Minimum Wage rates are as follows:
|Current rate||Rate from 1 October 2016|
|21-24 year olds||£6.70||£6.95|
|18-20 year olds||£5.30||£5.55|
|16-17 year olds||£3.87||£4.00|
*This apprentice rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.
The rate for the National Minimum Wage will, from now on, change every April so that both the National Minimum Wage and the National Living Wage rates will increase from the same effective date come April 2017, rather than the usual October change for the National Minimum Wage.
The National Living Wage rates are set to increase gradually alongside rises in the National Minimum Wage, and are projected to rise to more than £9 per hour in 2020.
The Government will ask the Low Pay Commission to suggest increases in the National Living Wage.