National Living Wage Extended

Mar 22, 2021

The National Living Wage has been extended to 23 and 24 year olds, where previously the rate only applied to people aged 25 and over.

In addition, the government’s plan to increase the wages of lower paid workers by over 5% in April 2021 has been scaled back, with rises more in line with inflation, at around 2.2%.

Income boost for young and low income workers

The new rates from 1 April 2021 are:

  • National Living Wage (now 23 and above) – £8.91
  • Aged 21-22 inclusive – £8.36
  • Aged 18-20 inclusive – £6.56
  • Aged under 18 (but above school leaving age) – £4.62
  • Apprentices aged under 19 – £4.30
  • Apprentices aged 19 & over but in first year of apprenticeship – £4.30


Increased pressure on small businesses

Whilst the increase and extension is fantastic news for young people and those on low incomes, it also increases pressure on employers. These changes may be challenging for many small businesses to meet, as the negative impact of the pandemic continues to be felt in many industries.

The furlough scheme may have helped to ease the strain on payroll costs for businesses with reduced incomes over the last twelve months, but once the scheme ends and the increased wage rates come into effect, some employers may struggle with the increased costs.


If you’re concerned about the upcoming changes to the National Minimum and Living Wages, and how your business finances will be effected, get in touch with your advisor.


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