National Minimum Wage – The New Rates from 1 April 2021

 

The National Minimum Wage will increase from April 2021.  The higher rate, known as the National Living Wage will be £8.91/hour.

What is the National Living Wage?

You may have heard of the National Living Wage and wonder how this differs to the National Minimum Wage.

The terms are often interchangeable, however the correct definitions are as follows:

The National Living Wage is only applicable to those aged 23 and over (from April 2021 – previously those aged 25 and over). It relates to the rate of £8.91/hour (£8.72/hour for 2020/21).

The National Minimum Wage is the minimum amount payable to all of the other workers. As a result, the rates for those aged 22 and under (from April 2021) are all National Minimum Wage rates.

Who qualifies for the National Living Wage?

From April 2021 the qualifying criteria has been extended to 23 and 24 year olds. Previously this was only applicable to those aged 25 years or older.

Note that the current rate (2020/21) for 23 and 24 year olds is £8.20/hour, so this increase to £8.91/hour will likely catch out a few employers.

What are the National Minimum Wage amounts for the other age groups?

From April 2021 the hourly rates are as follows:

21 to 22 year olds must receive a minimum of £8.36/hour
18 to 20 year olds must receive a minimum of £6.56/ hour
Under 18s must receive a minimum of £4.62/hour

What is the minimum hourly rate for apprentices?

From April 2021 the apprenticeship rate is £4.30/hour.

The apprenticeship rate is applicable for those on an apprenticeship aged under 19 years of age or if they are in their first year of the apprenticeship.

Does everyone qualify for the National Minimum Wage?

Not everyone is entitled to receive the National Minimum Wage.

The main individuals who are exempt are the following:
– Self-employed individuals
– Company Directors
– Volunteers
– Students on work placements
– Workers younger than school leaving age (i.e. usually 16)