Over 2 million people will now receive a pay rise thanks to the increase in the national living and minimum wage rates
Over 2 million people now get a pay rise effective from April 1st 2018, thanks to an above-inflation rise in national living and minimum wage rates. The NLW will increase by 4.4%, from £7.50 to £7.83, meaning a full-time minimum wage worker will be over £2,000 better off since the introduction of the National Living Wage in April 2016. The tax-free personal allowance will also increase from £11,500 to £11,850.
Almost 400,000 young workers are expected to benefit from the fastest increases in the National Minimum Wage in over 10 years.
Business minister Andrew Griffiths said:
“Over 2 million people across the UK will get a step up in pay thanks to today’s rise in the National Living Wage and National Minimum Wage. The uplift means a pay rise of over £600 a year for a full time worker on the National Living Wage – that could be two months food shopping or a year’s electricity bills. So, if you should be getting a rise this month, check your pay, talk to your boss and report underpayment to Acas or HMRC.”
From 1 April 2018 the rates for:
- workers aged 25 and over will be £7.83 per hour
- workers aged 21 to 24 will be £7.38 per hour
- workers aged 18 to 20 will be £5.90 per hour
- workers aged under 18 will be £4.20 per hour
- apprentices under 19 or in the first year of their apprenticeship will be £3.70 per hour
Employers who underpay minimum wage rates could be liable for fines of up to 200% of the back pay they owe to workers and can be publicly named by the Department for Business, Energy and Industrial Strategy. Since 2013 the naming scheme has identified more than £9 million in back pay for around 67,000 workers, with more than 1,700 employers fined a total of £6.3 million. Since 2015, the government has doubled investment in minimum wage enforcement, spending £25.3 million in 2017 to 2018.
Following the ‘Good Work Plan’ being published in February, the government has announced the right to a payslip for all workers. The new law is likely to benefit around 300,000 people who do not currently receive a payslip from their employer.
For those paid by the hour, payslips will need to include how many hours the worker is paid for, making pay easier to understand and challenge if it is wrong. Part of the government’s Industrial Strategy, the government’s long-term plan is to build a UK workforce fit for the future by helping businesses create better, higher-paying jobs, nationwide.