Millions of people across the UK will receive a pay rise from today, with some seeing an increase of as much as £1,400.
The pay rise comes as the National Living Wage and National Minimum Wage increase.
More than 3 million workers in shops, restaurants and workplaces across the UK will benefit from the boost.
Initially announced at the Budget in Autumn, the 6.7 per cent increase will be worth £1,400 a year for an eligible full-time worker.
The National Living Wage will increase to £12.21 per hour, while the new National Minimum Wage will be set at £10.00 per hour.
The National Minimum Wage for 18-20-year-olds will also increase by £1.40 to £10.00 per hour – an increase which means full-time younger workers eligible for the rate will see their pay boosted by £2,500 a year.
Speaking ahead of the rise, Angela Rayner, who is also overseeing Labour’s plans to upgrade workers’ right, said: “This pay rise for over three million of the lowest-paid workers was a priority for this Government and means we’re already giving hardworking people more money in their pockets, and a proper wage increase worth over twice the rate of inflation.
“These changes are part of our plan for change – to raise living standards for people across the country, including apprentices and young people, giving them more job security and the huge pay boost they deserve too.”
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Business Secretary Jonathan Reynolds said: “We promised to make low pay a thing of the past. Now, as part of our plan for change and the biggest upgrade to workers’ rights in a generation, we are delivering that.
“Low pay is not only bad for workers, it prevents them from spending on our high streets and allowing local businesses to achieve their full potential.
“By ensuring that everyone gets a fair wage for the hours they work, we’re delivering the financial stability needed to kick-start economic growth and ensure our country is fit for the future.”
Unions welcomed the wage increase, with TUC general secretary Paul Nowak saying it would “make a real difference” to the lowest-paid workers and set out a path to ending “the outdated and unfair youth rates”.
“More money in working people’s pockets means more spend on our high streets – that’s good for workers and good for local economies,” he said.
What is the National Living Wage?
The National Minimum Wage is the minimum amount an employer must pay per hour for most workers, while the National Living Wage is the higher rate that applies to workers aged 21 and over.
This is the first time the National Living Wage has taken into account the cost of living and inflation and marks the first step towards aligning the National Minimum Wage for 18–20-year-olds and National Living Wage to create a single adult wage rate.
Low Pay Commission Chair Baroness Stroud said: “The increases we recommended are a big step towards making work pay and achieving a genuine living wage.
“These rates secure a real-terms pay increase for the lowest-paid, and substantial increases for young workers make up some of the ground lost against the adult rate over time.
“It’s important we continue to assess the effects of these changes on employers and workers; to that end, the Low Pay Commission will be consulting with both groups in the coming months.”
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