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Rebecca Florisson, Principal Analyst, Work Foundation at Lancaster University responded to the Government’s National Living Wage and National Minimum Wage announcement 

“It is positive news for low paid workers that the National Living Wage will rise by 6.7% in April 2025. This is firmly above inflation of 1.7% and annual nominal wage growth of 4.9%.

Successive rises in recent years have brought the NLW closer to the aim of two-thirds of median income but as we know, this still doesn’t account for the full cost of living as it continues to fall short of the Real Living Wage by around £800 per year.

“Low pay is a key driver of the precarity that 6.8 million workers in severely insecure work face. This is a critical boost to low-income workers after successive crises.

“It is particularly welcome that the national minimum wage for 18-20 year olds will increase by £1.40 per hour, representing the largest single increase on record.

“Young workers (18-24) are twice as likely as other workers to be in severely insecure work, and have borne the brunt of higher living costs such as rising rents in recent years.

“However, it is now vital that this money reaches the pockets of those in low paid work. This announcement must be backed up by more resources for the new Fair Work Agency to ensure workers get what they are owed. The ONS estimates that 334,000 people were underpaid in April 2022, and current enforcement resourcing means that many employers are unlikely to be inspected or held to account.”

Notes:

• Annual nominal wage growth is from the ONS June to August 2024
• Figures on compliance and enforcement of the National Minimum Wage are from the Low Pay Commission (September 2023)
• Statistics on severely insecure work from the UK Insecure Work Index 2024.