National living wage to rise to £ 9.50 an hour
Around two million workers will get a pay rise next year when the living wage drops from £ 8.91 an hour to £ 9.50.
The Treasury confirmed Monday ahead of Chancellor Rishi Sunak’s budget this week that the increase for all over 23s will take place on April 1.
The 59p hourly increase means a living full-time worker with a living wage will get a pay rise of more than £ 1,000 a year, according to the government.
But critics have questioned the extent to which better-off workers would consider the Chancellor to have already increased national insurance and reduced universal credit as inflation rises.
The 6.6% increase is more than double the current consumer price inflation rate of 3.1%.
While the national minimum wage applies to anyone of school leaving age, the minimum living wage applies to anyone 23 years of age and over.
For 21 and 22 year olds, the minimum wage will drop from £ 8.36 an hour to £ 9.18, while that for apprentices will drop from £ 4.30 to £ 4.81 an hour.
Mr Sunak said: “This wage increase ensures that we make work pay and keeps us on track to meet our goal of ending low wages by the end of this legislature.”
But there will be questions about whether the hike is enough to support families facing a cost-of-living crisis.
Torsten Bell, managing director of the Resolution Foundation’s Living Standards Think Tank, said it was “absurd” to claim that the increase would improve the situation for full-time workers of £ 1,000 because the increase “rapid” inflation will absorb two-thirds of the increase.
He also warned that companies with “reduced profits” and customers facing higher prices would lose out because of the hike.
Senior research economist Tom Waters of the Institute for Fiscal Studies think tank said rising inflation will “soften” the increase in real terms and noted that recipients of universal credit “will see their benefits. disposable income increases by only £ 250 because their taxes rise and they receive benefits. decreases as their income increases “.
Shadow Chief Treasury Secretary Bridget Phillipson said the increase was a “disappointing offer.”
“Much will be swallowed up by government tax hikes, cuts in universal credit and the failure to bring energy bills under control,” the Labor MP said.
“It is clear that the Labor Party is the only party serious about improving the prospects of working people. “
Frances O’Grady, general secretary of the Trade Union Congress, said the increase in the minimum wage is ‘vital’ but urged the government to ‘aim higher’ by raising it to £ 10 and undoing the cut universal credit.
She added: “This increase will not take effect until next spring, when many household budgets will have been hammered by rising bills and the reduction in universal credit.”
Federation of Small Business national president Mike Cherry has called for the increases to be “matched with support for those who will struggle to afford to keep their jobs.”
Liberal Democrat Treasury spokeswoman Christine Jardine suggested workers would be “bitterly disappointed” when they saw “nearly half of any increase wrested by the Treasury before it even reached their bank accounts “.
“Instead of a fair deal, families across the country are facing a budget nightmare with skyrocketing cost of living coupled with tax hikes left, right and center,” he said. -she adds.
Mr Sunak increased workers’ national insurance contributions by 1.25% to help pay for the NHS and social care, while he halted the universal credit increase of £ 20 per week.