Inner banner

“ They explain my accounts in a way that’s
easy to understand

About us

How a £10.50 minimum wage could destroy struggling businesses

Chancellor Sajid Javid launched plans to hike the minimum wage from it's current rate of £8.21 to £10.50 over the next five years. This was alongside plans of lowering the age threshold for those who qualify for the NLW from 25 to 21.

The Chancellor said: “We will make the UK one of the first major economies in the world to end low pay altogether."

“We’ll reward the hard work of millennials too, bringing down the age threshold for the National Living Wage to cover all workers over the age of 21.”

Currently the wage for under-18s is £4.35 while those aged between 18 and 20 are paid £6.15 an hour.

 

This represents a raise of more than 25pc but The British Chambers of Commerce (BCC) welcomed the Chancellor's announcement with caution.

photo from unsplash

Adam Marshall, director-general of the BCC, said:

"Companies already face significant cumulative employment costs, including auto-enrolment, the immigration skills charge and the apprenticeship levy.

"The Government must take action to alleviate the heavy cost-burden facing firms, or risk denting productivity and competitiveness."

The Federation of Small Businesses (FSB) warned that four in ten employers already experienced rising operating costs due to employment costs.

Mike Cherry, chairman at the FSB, said:

"This increase will leave many small employers struggling and, without help, could make some small firms unviable.

"Any drop in age eligibility for the national living wage should be gradual. A sudden drop to 21 poses a real risk to jobs and the economy."

Tej Parikh, chief economist at the Institute of Directors, said:

"Raising the thresholds is a delicate balancing act, as too high a bar risks forcing firms to reduce staff numbers amid elevated costs.

"It's crucial that the approach is evidence-based, which is why the low pay commission was set up in the first place."

For more information on how we can help your business manage wage rises, contact us on mail@moco.co.uk