On April 1 the government’s new national living wage will become law.

If you’re working and aged 25 or over and not in the first year of an apprenticeship, you’ll be legally entitled to at least £7.20 per hour.

That’s an extra fifty pence per hour in your pocket and the government says it is committed to increasing this every year.

By 2020 the rate should rise to £9.

If you’re an employer, you’ll need to make sure you’re paying your staff correctly from April 1, as the national living wage will be enforced as strongly as the current national minimum wage.

Here are some things you need to be aware of:

What is the current minimum wage?

The current national minimum wage, which was introduced by Labour in 1998, is £6.70 an hour for those 21 years of age and older.

For 18- to 21-year-olds it is £5.30 and for under-18s it is £3.87. For apprentices it is £3.30.

Employers legally have to pay a minimum wage to employees.

However there are a number of people who are not entitled to the minimum wage such as:

• Self-employed people.

• Volunteers or voluntary workers.

• Company directors.

• Family members, or people who live in the family home of the employer who undertake household tasks.

Is there a current living wage?

No there is not. Paying what is considered a “living wage” is optional for employers.

A campaign by an independent organisation called the Living Wage Foundation says that London employers need to pay their workers £9.40 for them to be able to rent and feed themselves there - and £8.25 in the rest of the country.

Currently paying this "living wage" is entirely optional.

However employers are required to pay the minimum wage, but they need pay no more - even if their workers cannot live off it.

What is changing?

Under the Conservatives' summer Budget, a new national minimum wage is being set.

It is being re-branded as a national living wage because it should be what people need to live off.

Employers will no longer be allowed to pay the £6.70-an-hour rate, but will have to pay the new national living wage - £7.20 an hour.

This is in fact an overall increase of 50p per hour.

This blanket increase covers the whole of Britain, with no special rate for more expensive areas such as London.

George Osborne's plans are for the rate to rise to £9 across the UK by 2020.

The government's national living wage is not connected to the Living Wage Foundation's rate.


So will everyone be paid the new living wage?

No they won’t. The new national living wage will only apply to those over 25 years old.

Anyone under 25 will still be on the £6.70 rate, and less if they are under 21.

However they will still be entitled to the national minimum wage.

Do I have to do anything to get the new living wage?

If you are eligible you should see the increase in your pay automatically from April if you currently earn less than £7.20 per hour.

So check your payslip then.

If you don’t see the difference in April, you may want to speak to your employer or visit www.acas.org.uk for more information.

If I’m an employer what do I need to do to make sure I am paying the new wage?

According to government guidance there are employers need to take these four steps to be ready for the change.

1. Check you know who is eligible in your organisation. Find out at www.gov.uk/employment-status/overview

2. Take the appropriate payroll action.

3. Let your staff know about their new pay rate.

4. Check your staff under 25 are earning at least the right rate of national minimum wage.