The announcement of the new London Living Wage came at the end of 2016. This is great for workers; but countless businesses have stated they were already struggling with the National Living Wage - or is it the National Minimum Wage? Or are they talking about the real Living Wage?

The debate continues to make the news nearly every week with different publications using different terminology. Let’s take a look and help clarify what’s what…

The National Minimum Wage

This is a rate of pay per hour, set by the government and reviewed every year, which it is illegal to pay any working person less than.

Workers must be at least school leaving age (16 by the last Friday in June of the school year) to get the National Minimum Wage.

As of October 1, 2016, workers aged 18 and under are entitled to £4 per hour. 18 to 20-year-olds get £5.55, 21 to 24-year-olds are entitled to £6.95 an hour and those over 25 get £7.20 an hour.

The National Living Wage

This is where many people get confused as the government has recently taken to rebranding the National Minimum Wage (NMW), as the National Living Wage (NLW) — meaning it actually has nothing at all to do with the Living Wage.

The government’s National Living Wage was introduced on April 1, 2016 for all working people aged 25 and over, and is set at £7.20 per hour and only applies to people over 25 years of age.

The National Living wage is set to rise again to £7.50 on April 1st 2017, meaning employers can choose to pay the additional rate prior to the National Minimum wage aligning on October 1st.

The (voluntary) Living Wage

In London this stands at £9.75 an hour, and in the rest of the country it is £8.45 an hour.

Many organisations are using the accreditation as a way of demonstrating their commitment to being an ethical employer and there are studies which suggest that adopting the voluntary living wage has helped cut absenteeism and improve retention of staff.