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What is the National Living Wage and the National Minimum Wage?

In the United Kingdom, we have something in place called the National Living Wage and the National Minimum Wage. Many people live in confusion as to what that means for everyone and with constant changes to it, how much the national living wage actually is.

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Source: Low Pay Commissions

The National Minimum Way is the minimum pay a person can receive per hour according to the law. However, the National Living Wage is something which you qualify for when you reach the age of 25 and above. Both rates are set by the government and can change according to legislation and having a set rate is a legal requirement. Failing to meet these rates can result in an employer being fined.

Recent National Living Wage Increase

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As of April 2018, around two million British workers saw their pay rise after the national living wage was raised again. The national living wage refers to the hourly rate which is deemed the minimum for those aged 25 or over working in Britain.

In addition, the minimum wage for those aged 16-24 also went and those earning from apprenticeships are now earning an extra 20p per hour.

These new rates followed from the Chancellor’s, Phillip Hammond, pledge to do so last November. He confirmed hourly rates would rise all across the board from April 2018, including the National Living Wage.

The new rates kicked off on the 6th of April after a whopping 179 companies had been publically named and shamed for not paying their workers the minimum wage, causing much outrage.

How much is the National Living Wage now?

The recent changes saw the national living wage rise from £7.50 to £7.83 per hour, which is a 4.7% increase since the last year. The Treasury estimates that the new wage will mean that full time British workers who are on this basic form of payment can expect to be around £600 better off a year – which really can make all the difference to someone’s lifestyle. To put it another way, this will be equivalent to £50 a month or 33p extra per hour of work.

How much is the National Minimum Wage now?

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After the changes came into effect on the 6th of April 2018, the National Minimum Wage saw an increase.

It is now a requirement that apprentices are to be paid at least £3.70 an hour for those under the age of 18. For those over 18 but under 20 years old, apprentices must be paid at least £4.20 an hour and £5.90 if they are 24 and under. Apprentices who are 25 and over will need to be paid at least £7.83 an hour by law.

The body that sets the rates, Low Pay Commission, claims that this is the largest rise in a decade for 18-20 as well as 21-24 year olds, with the statics showing an increase in 4.7% and 5.4% respectively.

It has been argued that such new rates will work to boost the earnings of between 260,00 and 360,000 young works because the increase will lead to ‘spill over’ effects further up the pay distribution. In addition, some young workers may also see benefit from the increases in the National Living Wage, outlined previously.

To qualify for minimum wage, you must be of school leave age (16 years old). {previous to that, it is up to your employer.

Feeling strapped for cash?

If you find that either the National Living Wage or National Minimum Wage is simply not going to help you pay towards something you are in need of, why not check out Guarantor Loans. You can compare the best deals and borrow up to £15,000 – even with bad credit. To apply, you will be required to fill in some information about yourself and your guarantor. Provided your application is successful, you can receive funds in one lump sum within 24 to 48 hours of approval.

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