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Minimum wage rise set to be shelved next year

Paloma Kubiak
Written By:
Paloma Kubiak

The chancellor is reportedly looking to scrap plans to raise the minimum wage rate in 2021 due to affordability concerns amid the ongoing coronavirus pandemic.

YourMoney.com update 25/11/20: The chancellor has announced the National Living Wage will increase by 2.2% from £8.72 to £8.91 an hour from April 2021 and extended to workers aged 23 and over.

The minimum wage for workers aged 25 and over currently stands at £8.72 an hour and in April 2021, this was expected to increase to £9.21.

Further, the age threshold for the National Living Wage (NLW) was also expected to fall from 25 to 23 next year, and then to 21 by 2024.

However, the Low Pay Commission which advises the government on the level of the minimum wage has stated that any planned rise may now be “completely unaffordable” as a result of coronavirus.

And chancellor Rishi Sunak is rumoured to announce plans to shelve the usual April wage rises in the upcoming autumn budget.

Chairman of the Low Pay Commission, Bryan Sanderson, told The Daily Telegraph: “The Low Pay Commission always advises government based on a thorough review of the evidence and detailed discussions with workers and businesses alike.

“This is more important than ever, given the profound impact of Covid-19.

“We’ve listened carefully in recent months to the views of employers and trade unions, and we’ll continue to look at the latest economic data over the autumn, before agreeing recommendations on next year’s minimum wage rates in late October.”

Sanderson added: “There are not many winners in today’s uncertain world.”

Meanwhile, the government is reportedly planning a £30bn tax raid to be announced in the autumn budget, with middle classes bearing the brunt.

The raid could see fuel duty and corporation tax rise, and pension tax relief reformed, under Sunak’s plans to recoup cash spent during the coronavirus pandemic.