HR · 3 April 2018

National living wage set for £600 pay rise from April

Over two million people to get a pay rise thanks to a rise in national living and minimum wage rates.

Due to an above-inflation rise in national minimum and living wage rates pay will go up by 4.4 per cent from £7.50 to £7.83 on April 1st, 2018.

UK Employers who underpay minimum wage rates will face fines up to 200 per cent of the back pay they owe to workers.

Full time workers can expect to earn over £600 more a year, a total increase of over £2,00 since the national living wage was introduced in 2016.

Business minister Andrew Griffiths said: “Over 2 million people across the UK will get a step up in pay thanks to today’s rise in the national living wage and national minimum wage.”

“The uplift means a pay rise of over £600 a year for a fulltime worker on the national living wage – that could be two months’ food shopping or a year’s electricity bills.”

From April 1st, 2018, the rates for:

  • workers aged 25 and over will be £7.83 per hour
  • workers aged 21 to 24 will be £7.38 per hour
  • workers aged 18 to 20 will be £5.90 per hour
  • workers aged under 18 £4.20 per hour
  • apprentices under 19 in their first year of apprenticeship will be £3.70 per hour

Also from April 1st, 2018 the tax-free personal allowance will also increase from £11,500 to £11,850.

“So, if you should be getting a rise this month, check your pay, talk to your boss and report underpayment to Acas or HMRC,” said Griffiths.

The department for business, energy and industrial strategy can also publicly name any employers who underpay.

The scheme has identified more than £9m in back pay for over 67,000 workers, with more than 1,700 employers fined a total of £6.3m.

Since 2015, the government has doubled investment in minimum wage enforcement, spending £25.3 million in 2017 to 2018.

The uplift comes after the government published its good work plan in February, which announced the right to a pay slip for all workers.

The new law is likely to benefit around 300,000 people who do not currently get a pay slip.

Pay slips will also have to include how many hours the worker is paid for, making pay easier to understand and challenge if it is wrong.

The move is part of the government’s industrial strategy, the government’s long term plan to “build a Britain fit for the future” by helping businesses create better, higher-paying jobs across the UK.

For more information on the national minimum wage and national living wage and to report underpayment, visit www.gov.uk/checkyourpay or contact Acas for free and impartial advice.

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ABOUT THE EXPERT

Carly Hacon is a reporter for Business Advice. She has a BA in journalism from Kingston University, and has previously worked as a features editor for a local newspaper.

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