National Living Wage - the lowdown

The National Living Wage will be upon us in April 2016 – but what exactly is it? Search's HR expert June Fraser explains... 

As you will know, there is currently a National Minimum Wage as follows:

  • £6.70 p.h. for workers 21 and over
  • £5.30 p.h. 18-20 yrs
  • £3.87 p.h. for 16-17 yrs, who are above school leaving age but under 18
  • £3.30 p.h. for apprentices under 19 or 19 or over who are in the first year of apprenticeship.

In addition to these National Minimum Wage levels, which will remain as they are, the government are now introducing a mandatory National Living Wage for workers aged 25 and over. (It should not be confused with the Living Wage Foundation - an initiative of Citizens UK that sets a voluntary minimum wage for London and the rest of the UK).

The rate for those workers aged 25 and over from April 2016 will be:

  • £7.20 p.h. (50p above the NMW)

This works out at a £910 per annum increase in earning for a full-time worker aged 25 or over currently on the NMW. 

As with the NMW the National Living Wage will increase each year and it is anticipated it will reach £9.00 p.h. by 2020.

So, great news for employees over 25 currently on the NMW but for many employers, this will mean a huge increase in their current wage bill with an estimated 6 million people set to benefit from the change.


HOWEVER it isn’t all doom and gloom for employers:

  • Corporation tax is being cut by 2% to 18 per cent by 2020.
  • Employers will be able to reduce the NI contributions they currently pay for their employees by 50% up to £3,000.

Search Seminars on National Living Wage

Search Consultancy is holding a series of breakfast seminars in conjunction with leading law firm JMW Solicitors, focussed on the National Living Wage and what it means for managers and employers. If you would like to attend, please sign up below:

  • Skelmersdale – Tuesday 12th April – Manor Hotel
  • Leeds – Thursday 14th April – Crafthouse
  • Sheffield – Tuesday 19th April – The Chimney House
  • Leicester – Wednesday 27th April - Marriott

More information

For some helpful information on how employers can get themselves prepared for the new National Living Wage, please click here to read an article from the CIPD.

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