Money saving expert Martin Lewis has issued a warning to people on minimum wage after an increase was announced for millions of workers in the Budget.
The financial expert, reacting to the Budget, spoke about how you could still be being underpaid illegally next April despite the minimum wage increase announced by Rachel Reeves.
The government announced that minimum wage will rise by 6.7 percent, worth about £1,400 a year for three million workers.
The minimum wage for 18-20-year-olds is also going up by £1.40 per hour, from £8.60 to £10 per hour, while the standard living wage is going up from £11.44 to £12.21.
But Martin has warned that some businesses won’t pay you the minimum wage simply because they haven’t realised it’s gone up.
Martin Lewis said: “The first thing I’d say to anyone on minimum wage, you put in your diary the 6th of April.
“You should be getting a payrise on April 6 because sometimes employers don’t do it.
“Or they don’t know and they miss out.”
Martin added that there are other costs which can push you below minimum wage, too.
He continued: “Other things to look out for on the minimum wage, cost of uniforms or having to buy equipment for your work. If they take you below minimum wage, you are being underpaid illegally.
“Also, all of your working time including opening up and clocking out, all of that type of stuff needs to be included in your assessment for what is minimum wage.
“So many people missing out on that.”
Martin then added that there are also implications for carers, because an increase to minimum wage can often push carers over the Carer’s Allowance threshold and cause them to lose all their benefits.
He said: “Where this gets really interesting is crossing over to one of the other key announcements of the day which is about Carer’s Allowance.
“Carers are the backbone of this country; people who care for their loved ones, doing over 35 hours. Many of them are vulnerable, many are on low incomes, and the way Carer’s Allowance, which is a relatively low payment anyway, we have this hideous cliff edge where you earn 1p over the earnings threshold and you lose every penny. It’s a terrible system.
“One of the ways they’ve fallen foul of it is when minimum wage goes up, and many of these carers are on minimum wage, they haven’t realised it’s gone up and they’ve earned over the amount that they’re allowed to earn, they’ve therefore lost out massively, losing £83 a week for going 20p over the threshold in a week, and they’ve not known, the system’s been crap, so it hasn’t been spotted and they’ve been asked to claw it back, sometimes thousands of pounds.”
Martin added that Carer’s Allowance threshold is being increased from about £150 to £190 a week, and the government is looking into the ‘cliff edge’, but that cliff edge will still be in place next April.
