• International Workplace
  • 8 October 2019

Plans to increase and expand the reach of National Living Wage

The Chancellor Sajid Javid MP has announced plans to end low pay in the UK, with a new target for the National Living Wage and extending it to many more workers.

The landmark extension to the rules on pay were announced by Sajid Javid in his keynote speech to the Conservative Party Conference. The planned changes include:

  • National Living Wage set to reach £10.50 by 2024 with a new target to reach two-thirds of median earnings;
  • It will be extended to 23-year-olds from 2021 and 21-year-olds within five years; and
  • This will be a pay rise of £4,000 by 2024 for the average full-time worker on the National Living Wage.

The National Living Wage currently applies only to those over the age of 25. But this announcement means that within five years two new targets will have been met – raising the value of the NLW to two-thirds of median earnings and reducing the age limit to 21. Low pay is widely defined as being less than two-thirds of median earnings.

The announcement will benefit over four million people. By 2024, full-time workers on the National Living Wage will see an increase in their annual pay of over £4,000 a year compared to the earnings of a full-time worker on the current National Living Wage. On current projections, it means the NLW is set to rise to £10.50 by 2024.

Javid also unveiled a package of pledges backing “the People’s Priorities,” including

a Brexit Red Tape Challenge online portal to give businesses the opportunity to tell government where red tape can be cut to help them boost growth

He said:

“Growing up above the shop my mum made clothes for, I know the importance of backing hard-workers earning the lowest wages. It’s also important that we support young people starting to build a life for themselves.

“Because of the hard work of the British people and the difficult decisions of successive Conservative governments we are now moving forward from a decade of recovery to a decade of renewal. We will end low pay, deliver an infrastructure revolution and spread opportunity to every corner of the country.”