Less profit with the living wage?
17/09/2015 by David Gibbens, Director, Poole Waterfield
In the Summer Budget 2015 George Osborne surprised many by introducing a “Living wage” for all those aged over 24, starting at £7.20 per hour in April 2016 with annual increases expected to bring the rate to £9 by 2020.
The national minimum wage will continue to apply to younger workers. The Low Pay Commission will set the rate annually for both the minimum and living wages.
This is clearly part of a strategy of putting the emphasis on employers in taking their employees out of benefits. This has echoes of the changes made to pensions with the introduction of auto-enrolment, which also places an additional burden on employers.
There are many who welcome these changes, but there is no avoiding the fact that for many small businesses with tight profit margins, these additional costs will not be helpful to their business plans.
Going forward businesses will need help on the technical impact of these changes on their payroll but just as importantly they will need to budget for what this will mean for their business
The minimum wage for low-paid workers will be increased on 1st October 2015, you can find the details below in the table or in full on the Government website.
| Year | 21 and over | 18 to 20 | Under 18 | Apprentice* |
| 2015 (from 1 October) | £6.70 | £5.30 | £3.87 | £3.30 |
| 2014 (current rate) | £6.50 | £5.13 | £3.79 | £2.73 |
| 2013 | £6.31 | £5.03 | £3.72 | £2.68 |
| 2012 | £6.19 | £4.98 | £3.68 | £2.65 |
| 2011 | £6.08 | £4.98 | £3.68 | £2.60 |
| 2010 | £5.93 | £4.92 | £3.64 | £2.50 |
Table source: https://www.gov.uk/national-minimum-wage-rates
If you have any concerns about the impending wage increase or would like any help to implement it please get in touch. We've made it easy to contact us via social media, email, phone or request a call back.
Email: enquiries@poolewaterfield.co.uk Call: 01384 455505 Request a call back
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Category: Latest News Author: David Gibbens, Director, Poole Waterfield
