From 1 April 2016, all workers over the age of 25 will have to be paid the National Living Wage (“NLW”) of £7.20 per hour. For workers under the age of 25, the National Minimum Wage (“NMW”) will continue to apply.

The NLW represents a 50p (7.5%) increase per hour compared to the current NMW for those over 25. In addition, the Government has stated that it aims to increase the NLW to more than £9 per hour by 2020, which the Office for Budget Responsibility estimates would be 13% higher than the projected NMW figure for 2020 for the over-25s.

Whilst this is welcome news for workers who will be entitled to the NLW, the increase in staff costs will present a real issue for businesses, especially those who currently employ a large percentage of their staff on NWM rates in sectors which are already struggling.