[UK] Low Pay Commission confirms approach to extended remit on pay

In the UK, a new policy paper from the Low Pay Commission sheds light on the potential pay rates that could take effect from April 2025, VWV reports.

The Low Pay Commission (LPC) advises the UK Government on the National Living Wage and the National Minimum Wage. 

Following the general election, the Government issued a new remit for the LPC and reportedly tasked it with:

• Considering the cost of living and inflation when making its pay rate recommendations;
• Ensuring its recommended pay rates do not drop below two-thirds of UK median earnings for workers aged 21 and over
• Narrowing the gap between the NMW and the NLW for 18-20 year olds by recommending the highest possible pay rate for this age group; supporting the Government's long-term goal of eliminating the 18-20-year-old rate altogether, so one NLW would apply to all adult workers.

According to VWV, the LPC's policy paper offers further insights into how the advisory body intends to approach its new responsibilities. It reportedly states that a broad range of economic indicators will be used to assess the cost of living and inflation when forming wage recommendations.

UK wages are currently rising faster than inflation. The LPC indicates that the threshold of two-thirds of median earnings will act as a minimum (or 'floor') when determining pay increases.

The paper also suggests that the NMW for 18 to 20-year-olds could see a more significant percentage increase than the NLW; in line with moves to close the pay gap between younger and older workers.

Based on current data, the LPC reportedly estimates that the NLW could rise to £12.10 (a 5.8 per cent increase) but this is an early estimate. The final figure could potentially increase further as wage growth trends are monitored throughout the rest of the year.

The LPC is reportedly set to submit its formal pay recommendations to the government by the end of October 2024. Revised NMW and NLW rates will come into effect in April 2025.

Source: VWV

(Quote via original reporting)

In the UK, a new policy paper from the Low Pay Commission sheds light on the potential pay rates that could take effect from April 2025, VWV reports.

The Low Pay Commission (LPC) advises the UK Government on the National Living Wage and the National Minimum Wage. 

Following the general election, the Government issued a new remit for the LPC and reportedly tasked it with:

• Considering the cost of living and inflation when making its pay rate recommendations;
• Ensuring its recommended pay rates do not drop below two-thirds of UK median earnings for workers aged 21 and over
• Narrowing the gap between the NMW and the NLW for 18-20 year olds by recommending the highest possible pay rate for this age group; supporting the Government's long-term goal of eliminating the 18-20-year-old rate altogether, so one NLW would apply to all adult workers.

According to VWV, the LPC's policy paper offers further insights into how the advisory body intends to approach its new responsibilities. It reportedly states that a broad range of economic indicators will be used to assess the cost of living and inflation when forming wage recommendations.

UK wages are currently rising faster than inflation. The LPC indicates that the threshold of two-thirds of median earnings will act as a minimum (or 'floor') when determining pay increases.

The paper also suggests that the NMW for 18 to 20-year-olds could see a more significant percentage increase than the NLW; in line with moves to close the pay gap between younger and older workers.

Based on current data, the LPC reportedly estimates that the NLW could rise to £12.10 (a 5.8 per cent increase) but this is an early estimate. The final figure could potentially increase further as wage growth trends are monitored throughout the rest of the year.

The LPC is reportedly set to submit its formal pay recommendations to the government by the end of October 2024. Revised NMW and NLW rates will come into effect in April 2025.

Source: VWV

(Quote via original reporting)