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Young workers ‘out of pocket’ due to minimum wage rules

Young workers ‘out of pocket’ due to minimum wage rules
Emma Lunn
Written By:
Emma Lunn

According to the Trades Union Congress (TUC), 18-20-year-olds could be missing out on £2,400 per year due to ‘unfair’ minimum wage rules when the rate goes up to £11.44 in April.

The TUC has published an analysis that reveals more than 700,000 workers in this age group across the UK risk being left “hugely out of pocket” due to being paid a lower rate of the minimum wage.

The main minimum wage rate is currently £10.42 per hour for those aged 23 and over, and £10.18 for 21- and 22-year-olds. The current minimum wage rate for 18-20-year-olds is £7.49 per hour, while those under 18 get paid a minimum of £5.28 per hour.

From April, the minimum wage rises to £11.44 and will be extended to those aged 21 and 22. However, minimum wage workers aged 18-20 will be paid almost £3 less per hour as their minimum wage will rise to just £8.60 per hour.

The TUC calculated that this gap in hourly pay will cost workers aged 18-20 an estimated £2,438 per year, or £47 per week.

The TUC says that paying a lower rate to younger adults is “unfair” and that the tiered rates system must be “overhauled”.

‘It’s time to put an end to low-pay Britain’

The Low Pay Commission has previously stated that the gap between youth rates and adult rates has widened and has said that there is a consensus on the commission that this should be addressed.

If elected, Labour has pledged to make sure the minimum wage is a real living wage that people can live on. The party also says it will remove age bands, as well as ban zero-hours contracts, which disproportionately impact young workers.

Paul Nowak, TUC general secretary, said: “Everyone should be paid fairly for the job they do. But too many young workers are still being left hugely out of pocket because of outdated youth rates of the national minimum wage.

“More than 700,000 workers aged 18-20 face this pay penalty – they are getting less than older workers for doing the same job. Young people up and down the country are being hammered by the cost-of-living crisis – like everyone else, they need more money in their pockets now.

“That’s why we’re backing Labour’s New Deal, which has pledged to introduce a real living wage for workers – as well as banning zero-hours contracts, which blight the lives of many young workers. It’s time to put an end to low-pay Britain.”

Related: Named and shamed: The 500 companies who failed to pay minimum wage