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Increases to National Minimum & Living Wage from April

Thursday 26th April 2018

As we enter the 2018/19 financial year, changes to National Minimum Wage and National Living Wage have come into force that will positively impact contractors on lower hourly rates.

On 1st April 2018, the National Minimum Wage and National Living Wage increased once again, bringing pay rates to an all-time high, and benefiting workers across the UK.

National living wage

The Minimum Wage was introduced within the UK on 1st April 1999, following the National Minimum Wage Act 1998 and the establishment of the Low Pay Commission who advise the government on the rate of NMW each year. Minimum Wage in 1999 was just £3.60 per hour, and it was thought that prior to the introduction of the Act, 1.9 million people were paid even less. Since then the National Minimum Wage has been set each October, with the new rate coming into force the following April.

The National Living Wage was introduced in April 2016 and made it mandatory for those aged 25 or over to receive a higher rate of pay to reflect the cost of living. NLW came about due to the government’s endeavours to move from a ‘low wage, high tax, high welfare society’ to a ‘higher wage, lower tax, lower welfare society’, thus reducing reliance on the benefits system.

The increase in NMW and NLW is a fantastic step for contractors on lower paid contracts, as it will mean that their take-home pay will increase each month. The changes are as follow:

National Living Wage

Aged 25 & over

Rose from £7.50 to £7.83

National Minimum Wage

Aged 21-24

Rose from £7.05 to £7.38

Aged 19-20

Rose from £5.60 to £5.90

Under 18

Rose from £4.05 to £4.20

Apprentice

Rose from £2.50 to £3.70

If you have any questions about your contracting hourly rate, contact the team at Sterling today.

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