National Living Wage

Present and future wage rates

First, it is appropriate to discuss the upcoming changes to the minimum wage, of which the National Living Wage is the highest rate of pay. Below is a table which highlights the current rate of NLW and the ages entitled to it, as well as the new structure from 1 April 2021.

As seen, the current age threshold for NLW is 25 years and above, which sits at £8.72 an hour. However, from 1 April 2021, employers must be careful not to include 23- and 24-year-olds to their list of those entitled only to NMW as the NLW threshold has been lowered to cover ages 23 years and over. Therefore, from 1 April 2021 onwards, NMW will only apply to those aged between the compulsory school age and 22.

Age	Current rates	Rates from 1 April 2021
Workers aged 25 and over (NLW)	£8.72 an hour	–
Workers aged 23 and over (NLW)	–	£8.91 an hour
Workers aged 21–24	£8.20 an hour	–
Workers aged 21–22	–	£8.36 an hour

In the history of minimum wage law, 23- and 24-year-olds have always belonged to the NMW group, albeit at a higher wage band, and this change could potentially act as an indicator of what’s to come. The Government has previously outlined its plan to widen the NLW’s reach in the next few years, so it applies to all those over the age of 21. While such an intention is yet to be laid out as a matter of fact, it can be argued that this threshold shift, at a time that many hoped that minimum wage rates would be paused due to coronavirus, could be used to trial a roll-out of a much lower threshold in the future.

Though the future is unknown and the possibilities it could bring are drowned in speculation, the current change may be given more