The new National Living Wage is intended to ensure that work pays, and reduces reliance on the state topping up wages through the benefits system.
From April 2016, the government will introduce a new mandatory National Living Wage (NLW) for workers ages 25 and above, initially set at £7.20 – a rise of 70p relative to the current National Minimum Wage (NMW) rate, and 50p above the increase coming into force in October. That’s a £1,200 per annum increase in earnings for a full-time worker or the current NMW.
The adult NMW rate is currently £6.50. It will increase to £6.70 from October 2015. From April 2016 the premium will come into effect on top of the NMW, taking the National Living Wage to £7.20. The NMW will continue to apply for those aged 21+, with the premium added on top for more experienced workers taking the total hourly rate to the National Living Wage.