Commission set to recommend national living wage freeze

Ministers are reportedly considering halting plans to implement the planned national living wage increase from next spring.

The national living wage is currently set at £8.72 an hour for people aged 25 and over until 31 March 2021.

Chancellor Rishi Sunak said in this year’s Spring Budget that “forecasts would see the rate rise to £10.50 an hour by 2024”.

The wage was expected to hit £9.21 an hour from 1 April 2021.

However, the Chancellor contained a caveat in his March speech, saying the rise will only go ahead “if economic conditions allow”.

With the UK economy shrinking by a record 20.4% between April and June 2020, plans for the next incremental increase could be put on hold.

The Low Pay Commission (LPC), which advises the Chancellor, fears employers cannot afford to raise wages for low earners following the coronavirus crisis.

Bryan Sanderson, chair at the LPC, said:

“There are not many winners in today’s uncertain world.

“Our contribution to help steer a path through the complexity will be to provide a recommendation founded on rigorous research and competent analysis which has the support of academics and both sides of industry.”

The Chancellor is widely expected to announce plans to freeze the current national living wage hourly rates for 2021/22 in his next Budget speech.

For further information on the national living wage, please contact James Alesbury on 023 8046 1222.