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2019 Statutory Pay Increases

Statutory Pay Increases | National Living Wage | UK GDP

Chancellor Phillip Hammond announced during his October budget speech that the National Living Wage will increase from 1st April 2019. Similarly, the government also accepted all other national living wage increases suggested by the Low Pay Commission or LPC. This means that full time workers will enjoy an additional £690 per annum.

Let’s have a look at the breakdown!

YearAge 25+21 – 2418 – 20Under 18Apprentice
2018 – 19£7.83£7.38£5.90£4.20£3.70
2019 – 20£8.21£7.70£6.15£4.35£3.90

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Other Statutory Pay Increases

In addition, statutory maternity, paternity, adoption and shared parental pay as well as maternity allowance will increase to £148.68 a week from 7 April 2019. This was previously £145.18 a week.

Statutory sick pay will also increase on the 6th of April 2019 from £92.05 per week to £94.25 per week.

What is the Low Pay Commission saying?

The chairman of the LPC, Bryan Sanderson, said “The increase in the national living wage to £8.21 per hour in April 2019 will ensure a pay rise for the lowest-paid workers that exceeds both inflation and average earnings.”

The labour market has performed well and the economy has sustained economic growth. As a result of a sustained economic growth, the government is aiming for the national living wage to reach 60% of median earnings by 2020.

According to Personnel Today, the Low Pay Commission has currently estimated the National Living Wage will reach £8.62 per hour in April 2020.

In conclusion

In conclusion, there are a few benefits to the National Living wage increasing. Firstly, this should lift workers out of the poverty zone. Secondly, workers should have more disposable income that they can spend on goods and services. As a result, the gross domestic product or GDP of the country will increase due to high consumer confidence. Thirdly, the Gender Pay Gap should reduce as income can be more evenly distributed. Finally, as the spending power of consumers rises so will the demand for labour. Therefore, more jobs will become available and unemployment rate will decrease.  

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