Life - Articles - Chancellors increase to National Living Wage welcomed

"Millions of low workers will benefit from a pay increase from next April. At a time of continuing cost of living pressures, this will bring welcome relief to many, boosting their earning power. Over 21’s will benefit from an increase of just over 4% - taking their hourly wage up to £12.71 from next April. Although this will be welcome, it is less than the 4.8% triple lock uptick state pensioners will receive at the same time. It also falls short of the real Living Wage, which is currently £14.80 an hour in London and £13.45 in the rest of the UK - which many employers have signed up to.

“A hidden benefit is that the increase in the National Living Wage will also have a positive impact on pension contributions, enabling employees to build up larger pension pots for a more secure retirement. As a result of the increase in the National Living Wage, an increase to £12.71 an hour (£23,133 per year) means employees on the National Living Wage will benefit from a total annual pension contribution of at least £1,850.56 a year, made up of their own and their employer’s pension contributions, meaning roughly an additional £72 going into an individual’s pension over the course of a year. Many employees may receive more into their pension if their employer pays higher pension contributions than the auto-enrolment minimum. This may not seem much, but the earlier and longer pension contributions are made the bigger the likely pension when individuals come to retire."