National Living Wage | RBS Invoice Finance

Salaries fall after introduction of National Living Wage

Recent research by jobs portal CV-Library shows that the average salaries for new UK jobs fell in April, when the new National Living Wage was introduced.

The National Living Wage saw the minimum wage for those aged 25 or over rise to £7.20 per hour. However, this seems to have had the unexpected effect of lowering the advertised salaries of new jobs in the UK to an average of £32,899 — a 3.4% drop from the previous month when salaries for new jobs averaged £34,055.

The retail sector saw the most acute drop in salaries for new positions — an 8.9% fall from an average of £31,594 in March to an average of £28,762 in April. It has been argued by analysts that this is a knock-on effect of raising the wages of the lowest earning retail staff.

Further research from Adzuna shows that average advertised salaries were beginning to stall much earlier in the year. According to the figures, average salaries in the UK rose just £15 from £33,800 in February to £33,815 in March. This followed on from rises of 0.6, 0.8 and 0.6% in the preceding three months.

Doug Monro, the co-founder of Adzuna, said:

The new National Living Wage also poses a natural challenge to the status quo. Nerves about bigger wage bills could mean staff perks will be first to go to fund company’s extra costs. These reports are already flowing in, with overtime pay already taking a hit. [However,] April’s legislation is a crucial step to getting fair pay for existing workers.

For more news, views and reviews on funding and support for UK companies follow us on Twitter @RBSIF.

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