National Living Wage Set to Rise for over-25s to £7.50

In his first budget statement since becoming chancellor, Hammond has given a boost to the National Living Wage scheme.

National Living Wage was originally launched under his predecessor George Osborne, who had planned for it to reach £9 by 2020.

The rate, which comes into effect from April 2017, could cause concern for independent retailers that already encounter issues from employing a large number of staff.

Labour’s shadow chancellor John McDonnel recently pledged that he will bring in a ‘real’ living wage of £10 per hour by 2020.

21 to 24 year olds will receive an increase from £6.95 per hour to £7.05, 18 to 20 year olds from £5.55 to £5.60 and 16 to 17 year olds from £4 to £4.05.

Mike Cherry, national chairman at the Federation of Small Businesses said, “Government has listened to FSB’s concerns and has announced a more modest increase in the National Living Wage (NLW) to £7.50 per hour. The 4% increase is within the range of small business expectations.

“But small employers will need support, especially looking ahead to steeper increases to meet the 2020 target. Recent FSB research found that 47 per cent of small businesses cite labour costs as the main driver of the rising cost of doing business. For this reason, we are calling on government to increase the employment allowance from £3000 to £4000 to help small businesses increase pay and create jobs.”

James Lowman, chief executive of The Association of Convenience Stores said, “Convenience store retailers are already cutting back as a result of the introduction of the National Living Wage at £7.20. Today’s announcement of a £7.50 National Living Wage rate in 2017 will result in further staff hours being cut, investment plans being delayed or cancelled altogether and retailers having to take on more hours in the business to make ends meet.”