Two million of UK's lowest paid workers in line for £345 pay rise - just as bills increase

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The National Living Wage is now £8.91. Credit: PA

Around two million of the UK’s lowest-paid workers will receive a “well-earned” pay rise of £345 from Thursday with increases in statutory minimum wages.

As the pay rises come into force, a number of bills such as TV licences and council tax will also rise.

Workers are being urged to check their pay packets as the National Living Wage rises by 2.2% to £8.91, the equivalent of more than £345 per year for a full-time employee, and will be given to 23 and 24-year-olds for the first time.

Previously the age limit for the National Living wage was 25 and anyone under this was entitled to the National Minimum Wage.

Anyone aged over 23, working a 39-hour week and earning the legal minimum will now take home just over £18,000 per year.

There have also been pay increases in all the other age brackets.

New hourly minimum wage rates

  • £8.72 to £8.91 for workers over 23

  • £8.20 to £8.36 for 21-22

  • £6.45 to £6.56 for 18-20

  • £4.55 to £4.62 for under-18s

  • £4.15 to £4.30 for apprentices

Source: PA

Anyone on furlough and on the minimum wage will not see their wages rise until they return to the workplace.

The Living Wage Foundation said workers paid the voluntary so-called Real Living Wage will receive £1,150 more over the coming year, and £3,800 in London, compared with those on the statutory rate.

The Real Living Wage is not statutory, it is a recommended wage which employers can sign up to follow.

It is £9.50 outside of London and £10.85 in the capital for 2020/2021, an increase from £9.30 and £10.75 on the year before.

Ministers said the increase means a full-time worker on the National Living Wage will be taking home £5,400 more annually than they were in 2010 (although this figure does not take inflation in to account), and it will particularly benefit workers in sectors such as retail, hospitality and cleaning and maintenance.

Denise Coates was appointed CBE for services to the community and business in 2012. Credit: PA

While the average worker on the minimum wage will now make just over £18,000 per year, it was reported on Thursday that the boss of gambling firm Bet365 earned a pay packet worth £469 million in a single year.

This averages out at £1.28 million each day.

Denise Coates is said to have earned a £421 million salary in the year ending March 29, along with £48 million in dividends – thought to be one of the biggest packages in UK corporate history.

The 53-year-old founded the online gambling company in the early 2000s in Stoke-on-Trent after spotting the potential of internet betting to revolutionise the industry.

The company told the BBC the arrangements were “appropriate and fair”.

The salary is a significant hike on the basic wage of almost £277 million Ms Coates took home in the year ending March 2019, when she was comfortably the highest-paid boss in the country.

Ms Coates, Bet365’s joint chief executive, was the country’s largest taxpayer for the second year running, according to the last annual Sunday Times Tax List.

She and her family, who are worth £7.166 billion, had a tax liability of £573 million last year.

Ms Coates has previously used the company’s annual report to highlight her charity work.

In the year up to the end of March 2019 she donated £85 million from the business’s coffers to the Denise Coates Foundation, a charity which distributes funds to support charitable activities across the UK, up from £75 million the year before.

Council tax bills can be increased by up to 5%. Credit: PA

As the pay rises come into force, a number of household bills are also being hiked from April 1:

  • Energy bills: Bills could increase by up to £97 per year depending on your provider.

  • TV and broadband: Providers can increase their bills by up to £6 per month or £72 per year.

  • Council tax: Councils can increase bills by 4.99% from April Fool's Day.

  • Mobile phone bills: Customers could see their payments increase by up to 4.5%.

  • Road tax: For a standard petrol or diesel car, tax will increase by £5 to £155. Electric vehicles are exempt.

  • TV licence: Will become £1.50 more expensive.

  • Water bills: Some water bills are increasing by up to 5% or £14, but others will see theirs fall by up to 6%. On average, households will pay £2 less.

  • NHS prescriptions: Bills are increasing by 20p per item for those who have to pay.

Prime Minister Boris Johnson said the increase in minimum wages was a "well-earned pay rise to two million people, which will be a welcome boost to families right across the UK.

“To make sure the next generation isn’t left behind, everyone over 23 years old will also now be eligible.”

Business Secretary Kwasi Kwarteng added the increases "will help millions of families in every corner of the country, while supporting businesses as we prepare to safely reopen our economy and build back better from the pandemic.

“I’d urge all workers to check their pay packet to ensure they’re getting what they are entitled to, and remind employers of their duty to pay the correct wage.”

Mike Hawking of the Joseph Rowntree Foundation said: “The pandemic has shown the urgency of taking steps to tackle the injustice of in-work poverty and move towards a Real Living Wage.

“Today’s boost is necessary but as we start to recover from the impact of the last year, too many workers are finding that minimum wage increases are being wiped out due to inadequate social security, insufficient hours available to them, and high housing costs.”

Laura Gardiner, director of the Living Wage Foundation, said "there is still a substantial gap between this wage rate and one based on the cost of living, with National Living Wage workers falling billions of pounds short of a real Living Wage over the past five years."

TUC general secretary Frances O’Grady said: “Those expecting a decent pay increase today have been let down by the government’s decision to row back on the full rise they were promised.

“TUC analysis shows that one in three key workers earn less than £10 an hour. This can make it tough for them to pay bills and put food on the table.

“Ministers must get the minimum wage up to £10-an-hour to stop millions of working people from living in poverty.”