What are the changes?
New national minimum rates of pay take effect from 1 April 2020:
- The National Living Wage for ages 25 and above - up 6.2% to £8.72
- The National Minimum Wage for 21 to 24-year-olds - up 6.5% to £8.20
- For 18 to 20-year-olds - up 4.9% to £6.45
- For under-18s - up 4.6% to £4.55
- For apprentices - up 6.4% to £4.15
These are significant increases and may impact small businesses, therefore it is important to be aware of the change now in order to plan and budget for the increased costs.
- The government has pledged that the national living wage rate will reach two-thirds of median earnings within five years.
- On current projections, this would be around £10.50 in 2024. Therefore businesses should factor these increases into the 3-5 year financial projections in terms of labour costs.