Compulsory Living Wage from April 2016
In his budget announced today, George Osborne set out plans to introduce the Living Wage.
From April 2016, the National Minimum Wage will be replaced by the Living Wage. The current National Minimum Wage rate for adults over 21 is £6.50, rising to £6.70 in October. George Osborne’s announcement is for a Living Wage for over 25’s of £7.20 from next April, rising to £9 an hour by 2020.
If you look at the various bodies that campaign for a Living Wage, you will see that the principle is that workers should be paid enough to live decently and to provide for their family. The Living Wage is:
- An hourly rate set independently and updated annually
- Calculated according to the basic cost of living in the UK
- The current UK Living Wage is £7.85 an hour
- The current London Living Wage is £9.15 an hour
- Employers choose to pay the Living Wage on a voluntary basis
The crucial point about George Osborne’s announcement is that his Living Wage rate is not as high as the accepted Living Wage rate. In effect, it is a rise in the National Minimum Wage for those over 25.
While Rhys Moore, Director of the Living Wage Foundation, welcomed the pay rise for what he thought would be over 2.5 million workers, he is calling for an early meeting to George Osborne to discuss the differences in the rates and other concerns he had about the announcement today.
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