Minimum wage increases to £6.50
Brits in minimum wage jobs will soon have some extra money in their pockets, as the government has announced it is to increase this pay to £6.50 an hour. For around 1 million people in the UK, this means getting a pay rise of as much as £355 a year.
This is great news for people who’re paid minimum wage, as it adds up to a sizable hourly increase. From October, the wage will go up by 19 pence an hour – and it’s the first time this increase has been above the rate of inflation for six years.
Business Secretary Vince Cable revealed he took on board the recommendation of the Low Pay Commission in coming to his decision. The group had called for a 3% increase in minimum wage.
And the good news doesn’t end there, as some commentators believe that this will be the first of several minimum wage rises designed to bring it back to the value it was before the financial crisis took hold.
More for apprentices
Employees over the age of 21 will see the biggest increase to their minimum wage packet, but younger workers will also soon be taking home more. The government has revealed that 18 to 20-year-olds will bag a 10p-an-hour pay rise and 16 to 17-year-olds will get an extra 7p an hour. Finally, apprentices will get a 2% wage increase, taking their hourly pay from £2.68 to £2.73.
“The recommendations I have accepted today mean that low paid workers will enjoy the biggest cash increase in their take home pay since 2008,” Mr Cable said.
More pay = more budgeting
It’s undoubtedly good news that people on minimum wage will soon be taking home more money. However, prices are rising elsewhere, which means that careful money management is still necessary to make sure everything is covered.
MoneySuperMarket recently published its Bill Barometer, which revealed the annual cost of running UK homes totals £405 billion every year. And what’s most driving this increase? Bills.
All these outgoings mean that some households have struggled to keep up. The Barometer forecast that over a period of four weeks, one in four people will miss a bill payment. And a third who have missed a bill in the past year said they felt they were “hounded” as a result.
Making the situation worse
Of course, for many people with a traditional bank or building society account, missing a bill also means facing a fee from their financial services provider. Our research* earlier this year found that more than one in four people paid bank charges in 2013. Of these, more than half ended up in an unauthorised overdraft as a result.
At thinkmoney, things are different. We never charge our customers late fees, and because our personal accounts ring-fence all the money you need for your essential bills each month, you should never miss a payment.
In return for our monthly management fee, we regularly monitor your account to make sure everything is running smoothly, and we’re here to help and support you whenever you need us. To see what makes us different, watch this film.
*OnePoll questioned a nationally representative sample of 2,000 adults aged 18 and over between 10th January and 15th January 2014. Figures have been extrapolated to fit ONS 2013 population projections of 50,371,000 UK adults.