LPC welcomes acceptance of its 2019 minimum wage rate recommendations

LPC welcomes acceptance of its 2019 minimum wage rate recommendations

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Bryan Sanderson, Chair of the Low Pay Commission (LPC), today welcomed the Government’s announcement that it has accepted in full the recommendations the LPC made for future minimum wage rates.

Future rates were announced by the Chancellor of the Exchequer in the Budget, in line with those recommended by the LPC. The National Living Wage (NLW), the statutory minimum for workers aged 25 and over, will increase by 4.9% to £8.21 per hour. Rates for younger workers will also increase above inflation and average earnings. They will apply from 1 April 2019.

Bryan Sanderson, Chair of the LPC, said: “I am pleased that the Government has again accepted in full the Low Pay Commission’s recommendations for future minimum wage rates. The increase in the National Living Wage (NLW) to £8.21 in April 2019 will ensure a pay rise for the lowest-paid workers that exceeds both inflation and average earnings.”

“Over the past year, the labour market has continue to perform well and the economy, while subdued, has met the criteria of ‘sustained growth’ set out in our remit for the NLW. We therefore recommended an increase in line with a path to 60 per cent of median earnings by 2020. On current forecasts, we estimate that the NLW will reach this target at a rate of £8.62 in 2020.”

“We recommended real-terms increases to the National Minimum Wage (NMW) rates for younger workers and apprentices, as the labour market conditions for these groups remain strong. These rates will continue to rise faster than both inflation and average earnings. We opted for smaller increases than we recommended last year because of slightly weaker labour market conditions for young people, combined with insufficient evidence to fully understand the impact of the largest increases in a decade implemented in April of this year. However, next year’s will still be some of the highest increases on record.”

“The 2019 Low Pay Commission Report, containing the underpinning analysis and evidence used to make these recommendations, will be published on November 27.”

The LPC’s rate recommendations comprised:

  Current rate Future rate (from April 2019) Increase
NLW £7.83 £8.21 4.9%
21-24 rate £7.38 £7.70 4.3%
18-20 rate £5.90 £6.15 4.2%
16-17 rate £4.20 £4.35 3.6%
Apprentice rate £3.70 £3.90 5.4%
Accommodation offset £7.00 £7.55 7.9%

 

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