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National Living Wage April 2016

The National Living Wage is set to rise in April 2016. What does this mean and how will it effect you? 

What does this mean? 

The national living wage at the moment is £6.70ph from the 1st April this mandatory rate will rise to £7.20ph. The rise of the national living wage is 50p per hour. That means the annual rise of £910 for a full time worker on national minimum wage.

The rate of £6.70 will still apply to anyone aged 21-24. You will need to make sure that you enforce this correctly from April to make sure your staff are paid as they should be. 

Why is this happening? 

The government want to move away from a low wage, high tax and high welfare society. Employment is at a record high at the moment, so they  are taking action to make sure that work pays. This will also limit the need to top up wages through the benefits system. 

The UK employment rate has risen to a new record high of 73.7%, and average pay has grown 3% over the last year.

Over the last year, there has been a drop of 210,000 in the number of unemployed people.

Employment Minister Priti Patel said:"Employment is at a record breaking high, and wages have continued to grow strongly, demonstrating that this government is delivering for hardworking people.

With 2 million more people in work since 2010, the unemployment rate at its lowest in 7 years,"

What’s included when calculating the National Living Wage?

There are a number of elements including tax and national insurance contributions, wage advances or loans, the type of work your employee does and your method of payment to them.

For a guide on what to do next for both employees and employers have a look at link below for the steps you need to have put into action before April 2016. 


If you would like any help or advice please give us a call at Higgins Recruitment on 01234 328446 as we will be happy to help you or discuss how this will effect you & your business.