The National Minimum Wage in 2021
Minimum wage rates increase on 1 April. This short report looks at the 2021 increases and the path ahead for the next year.
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New rates of the National Living Wage (NLW) and National Minimum Wage (NMW) come into force on 1 April 2021. These follow recommendations made in the autumn by the Low Pay Commission (LPC). To mark the uprating, this report looks ahead at the implications of the incoming rates and the LPC’s remit for the year ahead.
The new NLW and NMW rates are set out below. The NLW now applies to all workers aged 23 and over. The previous age of eligibility was 25. This will come down again to 21 by 2024.
| Previous rate | Rate from April 2021 | Increase | |
|---|---|---|---|
| National Living Wage | £8.72 | £8.91 | 2.2% |
| 21-22 Year Old Rate | £8.20 | £8.36 | 2.0% |
| 18-20 Year Old Rate | £6.45 | £6.56 | 1.7% |
| 16-17 Year Old Rate | £4.55 | £4.62 | 1.5% |
| Apprentice Rate | £4.15 | £4.30 | 3.6% |
| Accommodation Offset | £8.20 | £8.36 | 2.0% |
These increases mark the first step on the path to the Government’s target of an NLW set at two-thirds of median earnings by 2024. This report sets out the latest pathway to that target, based on projections of average pay growth. We are currently consulting on the NLW and NMW rates to be introduced from April 2022.