Living Wage 2021: How much will it increase to, when will it increase and what else was said in the Budget

THE chancellor of the exchequer declared that there will be a rise in the national living wage in yesterday's Budget.

By Charlotte Hawes
Thursday, 28th October 2021, 2:52 pm
Chancellor of the exchequer Rishi Sunak delivering his Budget to the House of Commons.
Chancellor of the exchequer Rishi Sunak delivering his Budget to the House of Commons.

With the national living wage currently at £8.91 an hour for those 23 and over, the government have confirmed that there will be a rise from next year.

The national living wage is what the government has called the national minimum wage for those who are over 22-years-old since 2016.

Those below the age of 22 are eligible for the national minimum wage, which will also see an increase.

Sign up to our daily newsletter

Read More

Read More
Budget 2021: Millions of pounds to be pumped into Portsmouth to upgrade Hilsea L...

Here is everything you need to know about the wage increase:

What is the current minimum wage system in the UK?

National Living Wage (people aged 23 or over): £8.91 an hour

Minimum wage for 21 to 22-year-olds: £8.36 an hour

Minimum wage for 18 to 20-year-olds: £6.56 an hour

Minimum wage for under-18s: £4.62 an hour

Apprentice minimum wage: £4.30 an hour

The minimum wage for apprentices is based on those under the age of 19 or those over 19 who are in the first year of an apprenticeship.

Once an apprentice is over the age of 19 and finished the first year of their apprenticeship, they are entitled for the minimum wage of their age group.

How much has the living wage increased to?

The living wage for those 23 and over has increased to £9.50 an hour from £8.91.

This is an increase of 6.6 per cent and the government says that this will give full time workers an extra £1,000 a year.

Despite being called national living wage, it is not based on the cost of living, however, by increasing it to £9.50 an hour, it brings the wage closer to the actual living wage of those living outside of London, according to the Living Wage Foundation.

The pay rise will also see the national minimum wage go up to £9.18, while the apprentice rate will increase to £4.81 an hour.

Rishi Sunak, Chancellor of the Exchequer said as he delivered the Budget: ‘This is a government that is on the side of working people.

‘This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament.’

When will the wage increase come into effect?

The increase of both national living wage and minimum wage will come into effect from April 2022.

What else was said in the budget?

A series of further measures were unveiled during the Budget, which include:

-£7 billion for areas outside of London to improve transport

-£5 billion for health-related research and development, including towards tackling health inequalities and genome sequencing

-£3 billion to drive a “skills revolution”

-£1.4 billion fund for key innovative sectors and a new talent network to impress foreign talent into UK industries

-£850 million to “breathe life” back into cultural hotspots

-£700 million for a new fleet of patrol boats for Britain’s borders

-£700 million to improve youth clubs and sports

-£560 million to provide personalised maths coaching

-£500 million towards support for families and children, including new family hubs

-£435 million for crime prevention and the Crown Prosecution Service, part of which aims to improve the response to sexual assault and rape cases

-£5 million for cutting-edge treatments for veterans.

A message from the Editor, Mark Waldron

You can subscribe here for unlimited access to our online coverage, including Pompey, with 70 per cent fewer adverts for less than 20p a day.