For the new tax year starting per 1st April, there will be some changes made to the national minimum wage to ensure that the standard of living for all UK workers is maintained in line with inflation.
Minimum Wage and Living Wage in 2017
The national minimum wage and national living wage for the year 2017/2018 was set at £7.50 per hour for workers over 25 years old. It was £7.05 for workers between the ages of 21 and 24 and £5.60 for workers between 18 and 20. The minimum wage for apprentices was £3.50.
In 2018, the minimum and living wages are set to increase. The living wage and the minimum wage for people over 25 will be £7.83 per hour. Other minimum wages are £7.38 for workers between the ages of 21 and 24 and £5.90 for workers between 18 and 20. The minimum wage for apprentices will increase to £3.70.
Apprentices under 19
National Living Wage (25+)
It is expected that the minimum and living wage will keep rising, as the Government has pledged that the Living Wage will be increased to £9.00 by 2025 at the latest.
What Do These Changes Mean for an Employee?
For someone who earns the national living wage working 40 hours a week, will earn an extra £686 in the coming year if they keep earning the living wage. For those in the age categories 21-24, and 18-20-year olds, the increase in the minimum wage is the largest it has been in over 10 years.
What Do These Changes Mean for Employers?
The changes in the minimum wage and living wage rates will be in effect from the 1st of April 2018 so you need to make sure all employees are being paid at least the minimum rate for their age bracket. If you as an employer do not comply to the new rules, you may be liable to a penalty and/or fines.
Is your company affected by the changes in the Minimum and Living Wages? At The Financial Management Centre we have payroll experts with a wealth of experience. We use advanced systems that are regularly updated to ensure the changes in rates are implemented at the correct time. Do not hesitate to use our contact form or call us on 0333 202 7198. For more information on other changes due for the new tax year, read our guid