Chancellor Sajid Javid has pledged to raise the National Living Wage to £10.50 by 2024 at the Conservative Party Conference.

The Chancellor also set out proposals to lower the age threshold for those who qualify from 25 to 21. Currently the national living wage is £8.21 for workers aged 25 and over and £7.70 for those aged 21-24.

Earlier this year, Labour also pledged to raise the National Living Wage to £10 an hour in 2020 and to include all workers under 18 who currently receive a minimum wage of £4.35.

However, the Federation of Small Businesses has warned that the Chancellor’s plan could make some small businesses unviable and early years sector organisations say that the move will lead to more nursery closures without sufficient funding.

Neil Leitch, chief executive of the Early Years Alliance, said:

"A rise in the national living wage is fantastic for younger workers, but for the early years sector, this could be an additional cost that many providers will not be able to afford to bear."

“A few weeks ago, the Chancellor announced an extra £66 million in 2020 for early years education against a funding shortfall that currently stands at £662 million. We warned at the time that any national living wage increase would all but wipe out the extra funding, and today’s announcement confirms that money given with one hand has now been taken away with another.”

“There is no doubt that childcare professionals deserve a pay rise, but without proper funding of the Government’s flagship childcare schemes, this will inflict significant damage on the early years sector and there will be further closures.”

Last reviewed 7 October 2019