What is the national living wage?

The national living wage is the new statutory minimum wage rate that must be paid to workers aged 25 and over from 1 April 2016. The rate of the national living wage is initially set at £7.20 per hour. It will increase to £7.50 per hour on 1 April 2017.

Lower minimum wage rates apply to workers who are aged at least 21 but under 25; at least 18 but under 21; and under 18 and no longer of compulsory school age. There is a separate rate for apprentices who are aged under 19 or in the first 12 months of the apprenticeship.

The remit of the Low Pay Commission has been extended to include recommending the rate of the national living wage. The Government aims for it to reach 60% of median earnings by 2020, which on current forecasts would be around £8.60 per hour.

The national living wage is not related to the living wage rate used by the Living Wage Foundation, which campaigns for minimum pay levels to reflect the basic cost of living.