Many employers were concerned that the Government would not publish their April 2021 proposed statutory rates because of the immense focus on the pandemic. However, the rates were published in December to keep statutory rates in line with the consumer price index (CPI).
National Minimum Wage
All National Minimum Wage rates will increase on 1 April 2021. Rising from £8.72 to £8.91, an increase of 2.2%, there has also been a reduction in the age threshold. The new rate applies to workers aged 23 and over (previously 25 and over) and the main (adult) rate applies to workers aged 21 to 22. The new rates will be:
- Workers aged 23 and over – £8.91 an hour
- Workers aged 21-22 – £8.36 an hour
- Development rates for workers aged 18-20 – £6.56 an hour
- Young workers rates for workers aged 16-17 – £4.62 an hour
- Apprentices under 19, or over 19 and in the first year of apprenticeship – £4.30 an hour.
Statutory Maternity Pay
SMP rates change annually on the first Sunday in April. For 2021, the rate change date is 4 April when the expected new rate will increase from £151.20 to £151.97. This rate will also apply to statutory paternity, shared parental, adoption and parental bereavement pay:
- Statutory Maternity Pay (SMP)
First six weeks – 90% of employee’s average weekly earnings. Remaining weeks at the statutory rate or 90% of employee’s weekly earnings if this is lower - Statutory Paternity Pay (SPP)
Statutory rate or 90% of employee’s weekly earnings if this is lower - Statutory Shared Parental Pay (ShPP)
Statutory rate or 90% of employee’s weekly earnings if this is lower - Statutory Adoption Pay (SAP)
First six weeks – 90% of employee’s average weekly earnings. Remaining weeks at the statutory rate or 90% of employee’s weekly earnings if this is lower - Statutory Parental Bereavement Pay (SPBP)
Statutory rate or 90% of employee’s weekly earnings if this is lower
Statutory Sick Pay
From 6 April 2021, the new statutory sick pay (SSP) rate is proposed to be £96.35, up from £95.85. Employees are entitled to SSP when they are sick for four or more consecutive days. This rate continues for up to 28 weeks for any one period of incapacity for work.
Statutory Redundancy Pay Increases – Cap on a Week’s Pay
As from 6 April 2021, the new maximum amount of a week’s pay is predicted to be £544, an increase from the current maximum of £538.
To calculate Statutory Redundancy Pay, the maximum amount of a week’s pay is increased or decreased annually every September in line with fluctuations to the retail prices index (RPI). If the RPI for September is higher or lower than the previous September, the maximum amount of a week’s pay is adjusted by the same percentage. The change then comes into effect on 6 April the following year.
Voluntary Living Wage
Reviewed and updated every April, the National Living Wage will be paid to workers aged 23 and over as from April 2021. The rates anticipated for April 2021 are:
- London Living Wage – £10.89 per hour
- UK Living Wage – £9.50 per hour
Pension Minimum Auto-Enrolment Contributions
These rates are reviewed and updated annually each November. Currently, rates remain at the 6 April 2019 figures, being:
- Minimum employer contribution – 3%
- Minimum employee contribution – 5%
- Minimum total percentage to be paid into pension – 8%
If you need any further advice on statutory rates, or if you have any other HR queries, do call me on 0118 940 3032 or click here to email me.