The chancellor is set to increase the national living wage to £9.50 in Wednesday’s budget. It will rise from the current living wage of £8.91 per hour for those aged 23 and over.
People aged 21-22 will see an increase to £9.18 an hour from £8.36 and apprentices, those aged 16 or over not in full-time education, will get a rise to £4.81 from £4.30.
Kate Palmer is HR Advice and Consultancy Director at Peninsula. She says: “These changes, if confirmed, will likely come into effect from April 2022 and represent an increase of more than 5%; the third-highest annual rise since the financial crash in 2008.
“It’s expected that a similar increase will be applied across all age bandings of the national minimum wage rates, as well as to payments associated with family-friendly leave, for example, maternity, paternity, adoption, shared parental, and parental bereavement pay.
“The increase will likely also be in place for statutory sick pay entitlements; however, this may mean a subsequent rise to the lower earnings limit, which employees must meet to be eligible for most statutory payments.
“Organisations should prepare their payroll teams to manage the changes to take-home pay and update any associated policies, so staff are aware of the new pay rates. This increase in demand on payroll and HR teams may mean that organisations will have to recruit additional people, so it could also be beneficial to review recruitment strategies now, to ensure there are sufficient staffing resources in place.”