National Living Wage Set to Rise to £9.42 an Hour

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National Living Wage Set to Rise to £9.42 an Hour

Boris Johnon is expected to raise the National Living Wage to £9.42 an hour. However, there are some small firms, that are concerned about covering the cost. 

Prime Minister Boris Johnson is expected to announce a National Living Wage increase to £9.42 an hour within the next few weeks.

This rise will be introduced as part of the government’s solution to end the “low-wage, low growth economy.”

The Times newspaper has reported that Boris Johnson has taken recommendations from independent advisors to raise the National Living Wage by almost 6 per cent. For an employee who works a 35-hour week, that would result in an extra £928 each year before tax.

This is the third-largest annual rise since the financial crash.

Each year, the Low Pay Commission makes recommendations on the rate of minimum wage. A report from April has estimated that their 2022 recommendation would be £9.42 an hour. Some sources believe that the recommendation may even rise to £9.45, but no more than that.

These increases are due to a government-set target for the National Living Wage to reach at least two-thirds of median earnings by 2024.

Recently, it was revealed that some cabinets ministers believe businesses have become “drunk on cheap labour”. The Prime Minister wants sectors with staff shortages to offer higher pay, in order to attract more employees.

A recent report from the Resolution Foundation has also said: “Improvements in conditions would be very welcome given the poor record that many migrant-dense industries currently have when it comes to labour market rights.”

However, concerns regarding cash-strapped firms have now arisen, as many small businesses may be unable to find the extra money to pay employees. A significant wage rise could severely affect these businesses as they struggle with the aftermath of the pandemic and prepare for increased national insurance contributions.

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