National Living Wage comes into force

It is expected to give 1.3 million workers an immediate pay rise, reports The BBC.

The policy was announced in last summer’s Budget by Chancellor George Osborne, in an effort to create a higher-wage, lower-welfare economy.

Workers aged 21 to 24 will continue to be entitled to the National Minimum Wage of £6.70 an hour.


Adam Sowter, a hotel employee in York, told BBC Breakfast the extra money would help him pursue his ambition of becoming an actor.

However, his colleague Clare Vernon will be about £1,000 worse off over the next 12 months, because she is under 25. “We do the same amount of work,” she said.

“The hours are really unsociable, so me getting 50p an hour less to work until 03:00 can get a bit annoying – I’ve only got another four years to wait.”

The intention is for the NLW to rise to more than £9 an hour by 2020.

However, there are fears of job losses as companies struggle to pay the new higher wages.

The independent Office for Budget Responsibility has warned that 60,000 jobs could go as a result.

Sir George Bain, former chair of the Low Pay Commission, dismissed fears that the NLW could cost jobs.

“I think the claims are overblown, but I think it is too complicated to call in advance,” he told Radio 4’s Today programme.

The Living Wage Foundation, which inspired the idea but does not set the level of the NLW, welcomed its introduction, but urged businesses to “aim higher” and pay more than the statutory minimum.

Some employers have already pledged to do this.