National Living Wage is set to rise to £9.42 an hour within weeks, according to a report in The Times newspaper.
The increase forms part of the government’s plans to end the “low-wage, low growth economy”, the paper says, adding that PM Boris Johnson has taken the recommendations of independent advisors to raise the National Living Wage by 5.7%.
Workers to be nearly £1000 better off
It would see a person aged over 23 working a 35-hour week pocket an extra £928 a year before tax if the new rate is introduced.
Recommendations on the rate of minimum wage are made each year by the Low Pay Commission, an independent advisory body. An April report estimated that its 2022 recommendation would be £9.42 an hour.
The increases are part of a government-set target for the National Living Wage to reach two-thirds of median earnings by 2024.
Third biggest rise to National Living Wage since financial crash
Ministers see the impending boost to the minimum wage, which would take effect in April, as a way to help tackle what Johnson believes is a “low-wage, low-cost approach” across the economy, The Times reported.
A new minimum wage of £9.42 would represent the third biggest annual rise since the financial crash.
However, it said: “A significant increase to the minimum wage could hit some small businesses as they emerge from the pandemic and prepare for increased national insurance contributions to fund health and social care.”