National living wage

Susie MunroEditor's message: The national living wage was introduced on 1 April 2016, having been a surprise announcement in the Budget 2015. The decision to call the new rate the "national living wage" has caused some confusion. In fact, it is a new single hourly rate of the national minimum wage for workers aged 25 and over. The current rate is £7.20 an hour, but the intention is for it to reach 60% of median earnings by 2020, which will entail significant increases over the next couple of years.

Employers should not confuse the national living wage with the living wage rate used by the Living Wage Foundation, which is calculated on the actual cost of living, including essentials like rent, childcare and transport, and is appreciably higher.

Susie Munro, senior employment law editor

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