Last edited 02 Apr 2021

National Minimum Wage and National Living Wage

The Low Pay Commission (LPC) is an independent public body that advises the Government each year on the National Minimum Wage (NMW) and National Living Wage (NLW).

The National Minimum Wage was introduced in April 1999. At this time, the main rate applied to workers aged 22 and over and there was a separate rate for those aged 18-21. A 16-17 year old rate was introduced in 2004, and in 2010 an apprentice rate was introduced and 21 year olds became eligible for the adult rate.

The National Living Wage was originally announced in the July 2015 Budget, as a new statutory minimum wage for workers aged 25 and over, set at £7.20 per hour from April 2016. The Government asked the LPC to recommend increases in the NLW to reach a target of 60 per cent of median earnings by 2020.

In 2020, the Government set a new target for the NLW, to reach two-thirds of median earnings by 2024.

Ref https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/975183/LPC_2021_uprating_report.pdf

In April 2021, it was announced that the age threshold for the National Living Wage would be lowered from 25 to 23 years old and the 23-24 age category abolished.

Ref https://www.gov.uk/government/news/millions-get-pay-rise-from-today-as-national-living-wage-and-national-minimum-wage-increase-comes-into-effect

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