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Chancellor announces rise to National Living Wage

Tom Shearsmith
25 November 2020

The National Living Wage will increase by 2.2% to £8.91 for those aged 23 and over from April 2021, the Chancellor of the Exchequer has announced.

Payslips were expected to rise from £8.72 to £9.21 in April next year, but the increase is less than expected due to the Coronavirus pandemic.

People aged 21 and 22 will see their wages boosted from £8.20 to £8.36, whilst 18 to 20 year olds will see their pay go up from £6.45 to £6.56.

Chancellor Rishi Sunak also announced a new fund worth £4 billion for regional infrastructure which local authorities will be able to bid directly for up to £20 million to fund local projects, such as improving high streets and town centres.

Sunak also announced the Minimum Wage would increase but did not reveal by how much.

The Treasury has predicted the economy will contract by 11.3%, with economic output not expected to return to pre-COVID levels until Q4 of 2022.

Speaking in the House of Commons today, Mr Sunak said: "We are accepting in full the recommendations of the Low Pay Commission to increase the National Living Wage.

"A full-time worker on the National Living Wage will see their annual earnings increase by £345 next year. Compared to 2016 when the policy was first introduced, that’s a pay rise of over £4,000."

Responding to the Chancellor's Spending Review, Robert Colvile, Director of the Centre for Policy Studies, commented: “Today’s spending review recognises the extraordinary scale of the Government’s fiscal response to the pandemic, but also the extraordinary and long-lasting economic damage that it has inflicted.

“It is right to prioritise jobs, health and public services now, rather than immediately closing the deficit, but also right to acknowledge the enormity of the challenges ahead."

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