In April 2016 the government introduced a higher minimum wage rate for employed people over 25 years of age. However, it has come under fire as it fails to cover the basic needs of families. Low earning parents in full time employment are still unable to provide family basics. According to Child Poverty Action Group a single parent on the National Living Wage is £74 a week short of the minimum income needed.
The Living Wage Foundation has devised the real living wage as it argues the government’s National Living Wage is not high enough to meet people’s basic needs.
What is the National Minimum Wage and the National Living Wage?
The National Minimum Wage and National Living Wage are legally binding and according to the government’s website you must be at least:
- school leaving age to get the National Minimum Wage
- aged 25 to get the National Living Wage - the minimum wage will still apply for workers aged 24 and under
The National Minimum Wage, the government sets a minimum amount that workers must get paid on average for the hours they work. The minimum wage rate varies depending on your age and whether you are an apprentice.
The rates change (usually) in April each year, and the next increase is expected in April 2019. The current bands and rates are:
- 25 and over - £7.83
- 21 to 24 – £7.38
- 18 to 20 - £5.90
- Under 18 - £4.20
- Apprentice - £3.70
Real Living Wage
The Real Living Wage is based on the cost of living and is voluntarily paid by over 4,700 UK employers. The Living Wage Foundation accredits employers who pay the Living Wage which is now £9 in the UK and £10.55 in London.
The rate is independently calculated to reflect what people need to spend to feed, clothe and house themselves. Employers that have voluntarily signed up to this include Ikea, Oxfam and KPMG. Those that sign up to pay the real living wage must not only pay it to their staff but also pay it to any sub-contractors.
Did you know that this week is Talk Money Week?
Talk Money Week is organised by Financial Capability, as part of the Financial Capability Strategy for the UK that aims to get more people talking about money. They are an independent service set up by the government for employers, charities, financial services companies, researchers, schools, local authorities, parents and anyone looking to help people manage their money.
Talk Money Week is the annual celebration of the work thousands of organisations are doing to improve money management across the UK. Throughout the week 12-18 November organisations that are participating will:
- Encourage their customers to talk money
- Showcase their services, and
- Lead the charge to make their work more effective by turning evidence of what works into action at scale.
Organisations can visit their website to download the participation pack and add their service or event to the Talk Money Map.
As an employer how can you support your staff with money management?
Financial concerns can have a huge impact on our health, including our sleep. This in turn impacts our wellbeing and working performance. As an employer you are in a unique position to offer your employees support in managing money and making it go further. Certain incentives that you offer employees can also provide tax breaks for you as an employer. Here are some ideas of how you can support your staff:
- Offer financial education and wellbeing programmes
- Ease the burden of commuting costs with help on travel season ticket loans or a bike to work scheme
- Offer an employee assistance programme (EAP), that provide confidential counselling services
- Offer Flexible and voluntary benefits
- Have a flexible pay and reward package that is tailored to your employees' needs
- Are you providing a workplace pension? Workplace pension rule changes, ensure you are up to date with your responsibilities as an employer.
If you would like more advice on supporting your staff with financial education and making their money go further, then please contact us.