PAY RISE
Budget 2020 – National Living Wage to hit £10.50 an hour by 2024
EMPLOYEES who receive the National Living Wage will see their salary increase to £10.50 an hour by 2024.
In today's Budget, the Chancellor also announced plans to lower the age you have to be before you're entitled to it from 25 to 21 by 2024.
It is currently set at £8.21 per hour but he confirmed that it is due to increase by 6.2 per cent to £8.72 per hour from April 1.
It will add a huge £930 a year onto workers' pay packets but they won't feel the full benefit for another four years.
The National Living Wage is set by the government and is the minimum rate employers are allowed to pay employees over a certain age for each hour worked.
It is compulsory that all employers must pay it.
It was introduced by Tony Blair's New Labour government in 1999 and was originally called the National Minimum Wage.
As a result, full-time workers have seen their salaries increase by £3,680 in total since 2016.
Mr Sunak announced to MPs that a new remit was being published for the Low Pay Commission, which recommends the wage rates, and sets formal targets.
By 2024, the statutory rate will reach two thirds of median earnings, which on current forecasts would mean £10.50 an hour.
The current voluntary national living wage stands at £10.75 an hour in London and £9.30 outside the capital.
Bryan Sanderson, chairman of the Low Pay Commission, said the 2024 target was "ambitious".
He added: "We will need to listen closely to what employers and workers are telling us, and to very carefully assess the economic evidence in making our recommendations.
What is the difference between the Real Living Wage and National Living Wage?
THE National Living Wage is the minimum rate employers are allowed to pay employees aged 25 or over for each hour worked.
It was introduced by Tony Blair's New Labour government in 1999 and was originally called the National Minimum Wage.
The National Living Wage was an independently-calculated estimate of the rate workers needed cover their basics needs, and was higher than the National Minimum Wage.
In his 2015 budget, George Osborne re-branded the National Minimum Wage as the National Living Wage, though did not raise the rate to match the Living Wage Foundation's recommended rate.
As of April 2019, the National Living Wage stands at £8.21, while the National Minimum Wage is £7.70.
The Real Living Wage is the name now used by campaign group the Living Wage Foundation for their recommended minimum rate.
It is £9.00 per hour across the UK and £10.55 in London.
It is based on what a full-time worker and their family needs to make ends meet, and accounts for private rental costs, council tax, and the costs of food and public transport.
Employers are not legally obliged to pay staff this rate as it is voluntary.
A total of 5,708 employers - known as Living Wage Employers - are currently signed up to pay the rate.
"The current concerns around the coronavirus only reinforce the importance of taking economic conditions into account.
"We will be launching our written consultation in the coming days, to start the process of making recommendations on the 2021 minimum wage rates."
The National Living Wage was an independently-calculated estimate of the rate workers needed cover their basics needs, and was higher than the National Minimum Wage.
In his 2015 budget, George Osborne re-branded the National Minimum Wage as the National Living Wage.
The minimum rate for under 25s continues to be known as the National Minimum Wage, and is currently set at £4.35 an hour for under 18-year-olds and £6.15 an hour for those aged 18 to 20.
Workers aged between 21 and 24 earn a minimum of £7.70 an hour and apprentices earn £3.90.
Both are separate from the Real Living Wage, which is calculated on the cost of living and employers can choose whether to pay this or not.
In October the then Chancellor Sajid Javid first announced plans to increase to the National Living Wage to £10.50 by 2024.
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Today's Budget also revealed measures that will allow millions of self-employed workers to get sick pay.
It also saw a boost for boozers as the Chancellor announced a duty freeze on all alcohol for the second time in 20 years.
Stamp duty has been hiked by 2 per cent for overseas property buyers too.
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