National Living Wage 'to be hiked to £9.50'

25 October 2021, 12:48 | Updated: 25 October 2021, 13:59

The National Living Wage is to rise to £9.50, reports say, in a boost for people on low incomes.
The National Living Wage is to rise to £9.50, reports say, in a boost for people on low incomes. Picture: Alamy

By Will Taylor

The National Living Wage is to rise to £9.50, reports say, in a boost for people on low incomes.

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It will see the hourly rate for employees aged over 23 rise by 59p an hour, meaning the annual income of full-time workers on the living wage would jump by more than £1,000.

The 6.6 per cent increase will amount to more than twice the current consumer price inflation rate of 3.1 per cent.

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The Chancellor is expected to confirm the rise at Wednesday’s Budget and Spending Review.

It comes after pressure was put on the Government to help low-paid and younger workers, who were among the worst affected by the Covid pandemic.

While the National Minimum Wage applies to everyone of school-leaving age, the National Living Wage applies to everyone aged 23 and over.

From 1 April, young people and apprentices will also see their wages boosted as the National Minimum Wage for people aged 21-22 goes up to £9.18 an hour and Apprentice Rate increases to £4.81 an hour.

Chancellor of the Exchequer Rishi Sunak said: "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."

However there will be questions over whether the hike is enough to support families facing a cost of living crisis.

Shadow chief secretary to the Treasury Bridget Phillipson said the rise was an "underwhelming offer".

"Much of it will be swallowed up by the Government's tax rises, Universal Credit cuts and failure to get a grip on energy bills," the Labour MP said.

"It's clear that Labour is the only party serious about improving the prospects of working people."

Liberal Democrat Treasury spokeswoman Christine Jardine suggested that workers will be "bitterly disappointed" when they see "almost half of any rise snatched away by the Treasury before it even reaches their bank accounts".

"Instead of a fair deal, families across the country are facing a Budget nightmare with a soaring rise to the cost of living paired with tax hikes left, right and centre," she added.

Mr Sunak increased National Insurance Contributions for workers by 1.25% to help pay for the NHS and social care, while he ended the £20-a-week Universal Credit uplift.