Wage Increases [2021 Update]

2021 Pay Rises

The 2020 spending review was heavily focused on prioritising the funding to support the governments response to the Covid-19 pandemic, and the financial damage it has caused.

Although Covid was a large part of the spending review, the government was committed to support those who are low paid.

Read on to find out all you need to know about the minimum wage, living wage changes and general wage increases.

National Living Wage

The Low Pay Commission recommended that the government should increase the national living wage by 2.2% for those who are aged 23 and above.

Therefore, this has increased the hourly rate from £8.72 to £8.91, this is an increase of £0.16. Subsequently, the new wage is to be implemented in April ’21.

Moreover, the national living wage of a full-time worker will have increased by approximately £4,030 since it was introduced in 2016.

Five years on from when the NLW was introduced, the government continues to support those who are low paid and guarantee that there are annual pay rises without hindering the workers employment possibilities.

National Minimum Wage

As well as those in the national living wage bracket, the government increased the wages of those earning the national minimum wage.

Those aged under 18 who are earning National Minimum Wage had an increase of 1.5%, originally £4.55 then increased by £0.07, making the new wage £4.62. Moving onto the National Minimum Wage for those aged 18-20. Originally £6.45, it has increased by £0.11, therefore the new wage is £6.56.

Moreover, the National Minimum Wage of individuals aged 21-22 has increased by 2%.

Originally the wage was £8.20, an increase of £0.16, making it £8.36.

Furthermore, the apprentice wage had the biggest percentage increase of 3.6%, going from £4.15 to £4.30, a £0.15 increase.

The Covid Impact

It is evident that the Covid-19 pandemic had a huge impact on how much these wages were increased.

As a result, 2021 wages had a smaller increase than the previous year (2020).

Here are the statistics for the new wages that came into place in April ’20 (the previous year).

Firstly, the National Living Wage, for over 25-year-olds, was increased by 6.2%, from £8.21 to £8.72.

Secondly, the percentage increase for 18–20-year-olds was 4.9%, under 19s were increased by 4.6% and a 6.4% increase for apprentices.

You can clearly see the big difference compared to the April ’20 increase, to the April ’21 increase.

2020 and 2021s wages in comparison:

To clarify: Change in age categories –

Current: Apprentice, under 18, 18-20, 21-22 and then the National Living wage at 23.

Previously: Apprentice, under 18, 18-20, 21-24 and the National Living wage started at 25.

In Summary

In short, the new wages that are set to begin at the start of April ’21, may have had a lower increase. This is in comparison to the previous year. However, the government continue to improve workers’ pay each year.

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Categorised in: Small Business

This post was written by Daisy Vowles