To recap, the national living wage is the government-mandated minimum wage for 23-year-olds and over. This attempts to ensure that people earn enough to be able to live based on the rate of inflation. The changes will bring in an increase of £345 over the year for a full-time worker on the National Living Wage.

Younger workers aged 23 and 24 are set to benefit most from the changes, as they will now be included in the National Living Wage. This will see their pay boosted by 8.6% - an increase of £1,292 over the year for a full-time worker.

Impact on employers

There have been some concerns raised about how these increases may impact companies. The Recruitment and Employment Confederation (REC) reported that 15% of its members said an increase to the National Living Wage above £8.72 would force them to freeze hiring. A further 14% said they would have to make redundancies or reduce the work for current employees. However, an independent report published this year said there has been little or no evidence of job losses as a result of rising minimum wage levels so far.

From April 2021, the new rates will be:

• The National Living Wage for ages 23 and above: up 2.2% to £8.91;
• The National Minimum Wage for 21 to 22-year-olds: up 2% to £8.36;
• For 18 to 20-year-olds: up 1.7% to £6.56;
• For under-18s: up 1.5% to £4.62;
• For apprentices: up 3.6% to £4.30;

What is People Solution’s view on this?

We believe that hard work should be rewarded, and this is a positive change for workers across the UK. We’re also extremely proud that our workers are already paid to this level or above in many cases.