Minimum wage update as government moves to scrap 'discriminatory' age bands
Anyone receiving minimum wage could witness a major transformation next year as the government has moved towards establishing a single wage rate for adults. In the years ahead this shift will eliminate "discriminatory" age bands that determine how much people earn based on their age.
Deputy Prime Minister Angela Rayner argued the progression towards this new landmark will inject more money into working people's pockets, consequently boosting their living standards throughout the UK. She said: "We promised to make low pay a thing of the past, and deliver a wage people can live on, and that is exactly what this government is determined to deliver.
"We have already taken bold action to Make Work Pay with more than 3 million workers seeing a huge boost in their pay following our increase to National Minimum and Living Wage. This remit is the next milestone in our plan to get more money in working people's pockets, raise living standards in every part of the UK, and get our economy growing."
Present minimum wage rates per hour according to age:
21 and over, also known as the national living wage: £12.21
18-20 year olds: £10
16-17 year olds: £7.55
Additional minimum rates also apply for apprentices and individuals who receive accommodation through their employment and pay rent directly from their wages. Nevertheless, this fresh update moves one step nearer to equalising the wage disparities between these three categories.
Exactly what the single adult rate might resemble remains currently uncertain. The Low Pay Commission will be consulting on this modification which will probably see further details emerging in October when the commission delivers its annual recommendations to the government.
The Low Pay Commission, which counsels the government on alterations to the national minimum wage and national living wage annually, will consult with employers, trade unionists and workers on bridging the pay divide between 18-20 year olds and the national living wage.
Chancellor Rachel Reeves declared: "To ensure the right balance is struck between the needs of workers, business affordability, and the wider economy, the LPC is being asked to consult on several issues before recommending the new rates.
"Fair pay which supports working families is integral to our Plan for Change, because when working people are properly rewarded with more money in their pockets, businesses thrive and our entire economy benefits."
Last year, the commission's recommendations delivered a record minimum wage rise for apprentices and workers under 18. It also provided a £1,400 annual boost for full-time workers on the national living wage.
Business Secretary Jonathan Reynolds declared: "Low pay drags down living standards for our workers and in turn hurts our high streets and local businesses.
"This Government's Plan for Change will put money back in people's pockets, with this new remit marking the next step in considering how we ensure a fair deal for our lowest paid workers while maintaining a competitive economy that boosts businesses and their employees alike."
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