Changes to national living wage age bands will have ‘major impact’ – research

Reductions in the age threshold for being paid the national living wage will have a “major impact” on young, low-paid workers, research suggests.

The Resolution Foundation said changes coming into effect next April, including increases to the national minimum wage youth rates, will mean pay rises of up to 21% for 16 and 17-year-olds.

But despite the progress, low pay remains an ongoing problem for too many young workers, said the think tank.

Its report added that, from next April, young people aged 21-22 will receive the living wage rather than the lower youth rate – a pay rise of 12%.

Young people aged 16 and 17 will have the most significant pay rise of 21% or an additional £1.12 per hour, while 18 to 20-year-olds are set for a pay rise of up to 15%.

A low-paid 22-year-old working full-time will earn an extra £2,500 a year as a result of these changes.

The report said the increases will have a major impact on a large number of young workers.

Louise Murphy, of the Resolution Foundation, said: “Low-paid young workers are set to receive pay rises of up to 21% next April due to bumper increases in the minimum wage – which could mean an extra £2,500 a year for a full-time worker.

“We need to build on this good news and help more young people escape low pay.

“As well as further increasing the minimum wage, more needs to be done to support young people who want to increase their hours.

“Specific support is also needed for young women with children and young disabled people as they are most likely to be low-paid.”

Chancellor Jeremy Hunt said: “We are making sure work pays through this record increase to the national living wage. It will mean that a 21-year-old working full-time will get a pay rise next year worth over £2,000, a big boost that will help people get ahead.”

Published: 20/12/2023 by Radio NewsHub