Millions set for pay rise as tax thresholds and minimum wages increase
More than two million people are set for a pay rise as the national living wage and minimum wage thresholds increase, the Treasury has claimed.
The national living wage is increasing from £7.83 to £8.21, which equates to around £690 per year and will affect 1.8m people.
Read more: Osborne tax breaks for multinational firms ruled illegal by Brussels
Similarly, the minimum wage is set to increase to £7.70 for those aged between 21 and 24, as well as up to £6.15 for 18 to 20 year olds.
The Treasury said that 2.1m people would benefit from the changes.
It comes as tax threshold changes are also set to come into place from today, with 30m people set to reap the reward of an increased tax-free allowance, as well as higher threshold.
For the new tax year, there is a tax-free allowance of £12,500, up from £11,850, while the upper threshold has increased from £45,000 to £50,000.
But any increase in take-home pay is likely to be offset by the increase in minimum pension contributions, which are set to head up to eight per cent.
Employees will have to make up five per cent while employers will contribute the rest.
Read more: MPs slam BBC over freelancer tax system
It could see as much as £30 pounds a month lost from the average worker’s pay packet, but is set to make people better off in the long run.
A 22-year-old working full-time and automatically enrolled in the scheme could have an extra £55,000 in their pension pot by the time they retire, Sky News say.