National Living Wage comes into force

Today sees the National Living Wage come into force in the UK, with employers now required to pay employees aged 25 and over a minimum of £7.20 an hour.

The measure was announced by the Chancellor, George Osborne, in his Summer Budget last year as part of the government’s plans for a higher wage economy.

Around 1.3 million workers should see an their pay rise immediately, with the new rate 50p higher than the previous minimum wage.

Those workers aged 21 to 24 will still be entitled to National Minimum Wage of £6.70.

Around 900,000 women and 500,000 men will see their wages immediately. By 2020, 1.9 million women and 1 million men will have benefitted from a rise in their pay. It is hoped that the move will see an to the gender pay gap for the lowest paid workers.

Over the next five years women earning the National Living Wage will see their pay increase by over a 25% and rising more than 1.5 times faster than the salary of an average worker.

It is hoped the National Living Wage will increase to more than £9 an hour by the end of the decade.

The Chancellor said: “I said last year when I announced plans for the National Living Wage that Britain deserved a pay rise. Today, I’m proud to say Britain is getting one.

“So I’m delighted that 1.3 million people across Britain will benefit from the biggest wage increase in eight years thanks to the new National Living Wage.

“The National Living Wage will play a central role in moving Britain to a higher wage, lower tax, lower welfare economy. It will also mark the end of the gender pay gap for some of our lowest paid and hardest working people.”

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