The UK Government has announced that a National Living Wage of £7.20 per hour will be introduced next April for all working people aged 25 and over. This will be over and above the National Minimum Wage which will remain in place for those aged under 25. The initial National Living Wage rate is based on a premium of 50p over the National Minimum Wage adult rate that will apply from 1 October 2015.

The National Living Wage will be compulsory and the Low Pay Commission will be asked to recommend future rises, with the Government aiming for an hourly rate of £9.00 by 2020.

Employers can currently choose to pay the Living Wage on a voluntary basis. The current rates are £9.15 in London and £7.85 for the rest of the UK. Those rates will be undercut when the National Living Wage is introduced next April.