Making his Budget speech in Parliament on Wednesday afternoon, the Chancellor said the hike amounted to a pay rise of over £1,000 per year for those working full time on the National Living Wage. He announced: “This is a major commitment to the high wage, high skilled economy of the future.”
But the rising cost of living is likely to leave UK households £1,000 worse-off in 2022, according to Resolution Foundation analysis.
This year has seen a culmination of bill increases, tax hikes, and benefit cuts, and inflation is set to rise to its highest level for eight years.
The gas shortage crisis has meant gas prices have risen by 250 percent since January, and keep on climbing every day, forcing providers to close down and pass their customers onto more expensive suppliers.
Petrol has hit the highest level since September 2012, causing RAC bosses to call on the Government to cut VAT on fuel.
Food prices are also soaring due to a shortage of lorry drivers and CO2.
On top of rises, the Furlough scheme is coming to an end and the Government has decided to cut back benefits by £20 per week – leaving many low-income families on the breadline.
Workers and earning pensioners will have to pay 1.25 percent more in National Insurance contributions too.
Younger workers below the age of 23 will see their wages rise as well, but their pay will still be far below the income needed for a decent standard of living, according to the LWF.
Pay will increase by 9.8 percent for 21 to 22 year olds, from £8.36 to £9.18 an hour.
Those aged 18 to 20 will receive £6.83 instead of £6.56 – a 4.1 percent rise – and 16 to 17 year olds’ minimum wage payments will go from £4.62 to £4.81.
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