Minimum Wage Rises to £8.91 for 23+ for the first time in 2021

From April 2021, there will be some significant changes to the National Minimum Wage (NMW) and this includes a change to age brackets.

The NMW was first introduced on 1st April 1999 and each year, the Low Pay Commission (LPC) meets to decide what changes need to be made to this and the National Living Wage (NLW) which was introduced for the first time in 2016.  The independent body takes into account any changes in wage growth, predicted changes in pricing and aims to be modestly ahead of these to ensure standards are protected for all low-paid workers.

Employers should ensure they review the main changes:

1. Change to the National Living Wage Age Bracket

For the first time, the NLW will be extended to those aged 23 and over.  Currently, this wage is only applicable to people aged 25 and over.  This will see their wages rise to at least £8.91 from 1st April 2021, a rise of 71p per hour for some in this bracket.

2. All other wages will rise

From apprentices to those ages, 21-22 years old, all pay will rise at mostly smaller increments.

New National Minimum Wage & National Living Wage Rates

Rate from 1 April 2020Rate from 1 April 2021Increase
Aged 23 and above (NLW)*

(changed from aged 25 and above in 2021)
£8.72£8.912.2%
21-22 Year Old Rate

(changed from 21-24 in 2021)

£8.20£8.362.0%
18-20 Year Old Rate£6.45£6.561.7%
16-17 Year Old Rate£4.55£4.621.5%
Apprentice Rate£4.15£4.303.6%
Accommodation Offset£8.20£8.362.0%

On 31st December, the UK Government’s Department for Business, Energy & Industrial Strategy published a list of 139 companies that failed to pay £6.7 million to over 95,000 workers and this included many well-known household names such as Tesco, Costco and Pizza Hut.

>> We have published a guide to avoiding common mistakes when paying employees.

Author: Gary Parsons
Gary is MD & Co-Founder at Talk Staff, passionate about the role that people play in helping build long-term and sustainable businesses. He sits on local business advisory boards and has been key in leading the growth of Talk Staff from inception in 2009.
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