In the Budget that was revealed today, Philip Hammond, the chancellor disclosed that the national living wage in the United Kingdom is set to increase by almost five percent from £7.83 to £8.21 per hour.
The said increase is set to be implemented in April next year, the government of the United Kingdom anticipates that this will raise the annual pay of a person that has a full-time employment by £690 every year.
Also, Hammond disclosed that the Low Pay Commission will be given a new remit beyond 2020 as the minimum wages seem set to achieve its target of 60 percent of the median earnings, subject to a sustained growth in the economy.
Hammond stated: “We will want to be ambitious with the ultimate objective of ending low pay in the UK.”
He added: “But we will also want to be careful – protecting employment for lower paid workers. So we will engage responsibly with employers, the TUC and the LPC itself over the coming months, gathering evidence and views to ensure we get this right.”
However, some people cast doubt on the increase in wages, in light of the other hikes that were revealed by Hammond in the afternoon including personal tax allowance to £12,500 per year.
A private client services partner at EY, Tom Evennett, stated: “Today, despite the increase in the personal allowance to £12,500 from April 2019, the accompanying increase in the National Living Wage means that those working 35 hours a week on this wage will still be paying nearly £500 a year in income tax.”
He added: “The National Insurance thresholds remains much lower than the personal tax allowance. This means, assuming 2018/19 rates, these individuals would also pay over £750 in National Insurance. Those under 25 on the National Minimum Wage may be outside the income tax net, but even these people find themselves paying National Insurance.”