Today’s (April 1) increase in the minimum wage does not go far enough to help employees weather the current cost-of-living crisis, experts have warned.
All minimum wage workers will see their pay rise from today, with the National Living Wage – the legal minimum wage for people aged 23 and over – rising by 6.6 per cent to £9.50 from l hour, up from £8.91, meaning full-time workers will see their annual wages rise by around £800 a year.
The government said it was the biggest ever increase in the national living wage and would help ease cost of living pressures for low-wage workers.
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“While no government can control the global factors that are driving up the cost of basic necessities, we will act absolutely wherever we can to mitigate rising costs,” said Kwasi Kwarteng, business secretary.
However, although the increase in wages has been widely welcomed, experts fear that the increase will be swallowed up by rising prices.
“Many will argue that the increases don’t go far enough to counter soaring inflation and the rising cost of living,” said Joanne Frew, employment law manager at DWF.
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Frew also raised concerns that the cost of living crisis could put employers under increased scrutiny of their minimum wage compliance, and urged minimum wage employers to consider undertaking an audit of their books to minimize their risk.
“Many leading employers have already inadvertently broken the law, resulting in substantial penalties and reputational damage,” she warned.
Jamie Mackenzie, director of Sodexo Engage, said that while the pay rises were certainly welcome, “it can feel like giving with one hand and taking with the other” in the current environment or rising prices. price.
Mackenzie added that employers must also do their part to ease financial pressures. “Our data revealed that employees can save over £1,600 on benefits alone, showing that supermarket discounts or online cashback and e-vouchers can greatly help a workforce that feels the pinch,” he said.
Minimum wage rates for other age groups also increase from today. The minimum wage for employees aged 21 to 22 will rise by 9.8% to £9.18 an hour, from £8.36 previously.
Minimum wage employees aged 18 to 20 will see their wages rise to £6.83, from £6.56, and those aged under 18 will see an increase of £4.81 an hour, from 4 £.62.
Apprentices will also see their minimum wage rise by 11.9 per cent to £4.81 an hour, from £4.30 previously.