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NATIONAL LIVING WAGE : Understanding the new rate

01 April 2016  

As the national living wage comes into force, Omer Simjee investigates the issues facing employers

The national living wage, which came into force on 1 April, is a misnomer. It is a confusing label for what is in reality the introduction of a new rate of the national minimum wage (NMW) for individuals who are aged 25 or over. It bears no resemblance (other than the plagiarism of the name) to the actual living wage. This was established by the Living Wage Foundation approximately 15 years ago and is a voluntary hourly rate set independently and updated annually, based on the cost of a basic basket of goods to determine the actual cost of living. Rates for the living wage are currently £9.40 in London and £8.20 throughout the rest of the UK.

Last modified on 05 April 2016