Millions will get a £585 pay rise in April

The National Living Wage will rise from £7.20 to £7.50

Updated: 
Why millions will be getting a £585 pay rise


On 1 April, the National Living Wage is due to rise - which means you could well be in for a pay rise - finally.

The annual hourly rate is to rise from £7.20 to £7.50 next month, as announced in the chancellor's Autumn Statement last year, and Budget earlier this month.

See also: Budget 2017: What it means for you

See also: Pensions tax relief: is it so stupidly incomprehensible on purpose?

Philip Hammond said he hopes to give a big boost to the so-called 'National Living Wage', launched under his predecessor George Osborne's vision, in a bid to get it to £9 by 2020.

However, not all workers will benefit from the new rate - as it only applies to employees aged 25 and above.

For all other age groups, the following rules will apply (as of 1 April):

  • 25 and over: £7.50

  • 21 to 24: £7.05

  • 18 to 20: £5.60

  • Under 18: £4.05

  • Apprentice: £3.50

What this means for you - £585 richer a year

Credits: Getty

It's great news if you're 25 or over

If you fall into any of the above age groups, you should see your pay packet rise a little to reflect the hourly rate changes from next month.

If you work a 37.5 hour week on £7.20 per hour, you will currently earn £270 a week. A 30p per hour pay rise will increase that weekly salary to £281.25. That would make you better off by £585 a year.

Could my pay rise even further?

Yes, this is a real possibility. The above rates are government minimums and firms can, and often do, pay more.

Experts also claim the new National Living Wage is not enough. They say the rate should be more than £2 higher in London at £9.75, or £8.45 across the UK.

Unions have also criticised Hammond for keeping to the government's austerity policies, defining the increase as "measly" compared to the crisis currently gripping the country.

Katherine Chapman, director of the Living Wage Foundation, said: "We welcome any pay rise for low-paid workers, especially now in these uncertain times with speculations about food and other prices set to rise.

"The reality, however, is that a fifth of UK workers aren't paid enough to live on. There's still a gap between the Government minimum and our real Living Wage of £8.45 in the UK and £9.75 in London, which is based on what families need to earn to meet everyday costs."

What happens if my pay doesn't go up?

If you're entitled to a rise, but you don't notice a change, speak to your employer. If you're still unsure, get in touch with HMRC or the Citizens Advice Bureau for more advice.

State pension to rise by 2.5% in April 2017

Credits: Getty

The government has also confirmed the state pension will rise by 2.5% next month.

From 6 April, pensioners on the new flat rate pension will see their weekly payments increase to £159.55 from £155.65 currently, while the old state pension will rise to £122.30 from £119.30.

The change means pensioners will be more than £200 better off a year with total annual income boosted from £8,093.80 to £8,296.60.

For more information on the new state pension rates, see our guide here.

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