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Government plans to raise National Living Wage to £10.50 an hour

By Rachel Lawler

Living National Wage increase

Sajid Javid has pledged to raise the National Living Wage to £10.50 by 2024 in a speech at the Conservative Party conference.

The Chancellor also pledged to make the new minimum hourly wage applicable to workers aged 21 and over, down from the current age limit of 25.

Minimum hourly rate

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage - workers get it if they’re over 25.

Currently, workers aged 25 and over must be paid a minimum of £8.21 per hour. Those aged between 21 and 25 must be paid a minimum of £7.70 an hour.

It does not matter how small an employer is, they still have to pay the correct minimum wage.

The government says it will reveal more details of this plan in its next Budget, due to take place later this year.

Promised increases
Earlier this year, the Labour Party also pledged to increase the National Living Wage if elected. The party promised to increase the minimum rate to £10 an hour by 2020 and extend this to all workers aged 18 and above.

"Proper funding"
Neil Leitch, chief executive of the Alliance, said: “A rise in the national living wage is fantastic for younger workers, but for the early years sector, this could be an additional cost that many providers will not be able to afford to bear. Pay differentials across the sector are so marginal that an increase in the national living wage often means that all staff within a childcare setting have to get a pay rise.

“A few weeks ago, the Chancellor announced an extra £66 million in 2020 for early years education against a funding shortfall that currently stands at £662 million. We warned at the time that any national living wage increase would all but wipe out the extra funding, and today’s announcement confirms that money given with one hand has now been taken away with another. There is no doubt that childcare professionals deserve a pay rise, but without proper funding of the government’s flagship childcare schemes, this will inflict significant damage on the early years sector and there will be further closures.”

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