Beauty salons: National Living Wage increasing 2.2% to £8.91 per hour in 2021

Chancellor Rishi Sunak has outlined the Government’s spending plans for the coming year during the coronavirus pandemic, which includes a 2.2% increase in the National Living Wage (NLW) in April 2021 to £8.91 an hour.

The current NLW is £8.72 per hour, so this change will result in a full-time worker on NLW expecting to receive £345 more next year. 

This increase will also be extended to include those aged 23 and over – previously it was only available to those aged 25 or above. Sunak said “these minimum wage increases will likely benefit two million people”.  

For small business owners, it’s important to note that Sunak announced that the business rates multiplier will be frozen in 2021–2022, saving businesses in England £575 million over the next five years. 

The Government is “also considering options for further Covid-19 related support through business rates reliefs” and will outline plans for 2021–2022 reliefs in the new year. 

Read the chancellor's full spending review now. 

But where does the chancellor’s spending review really leave beauty business owners?

Richard Lambert, chief executive of the National Hair & Beauty Federation (NHBF), said: “While we agree that employees need to be paid a fair wage, ultimately, we need businesses to be around in order to pay staff salaries in the first place. 

“Businesses owners have had a really tough time this year, with many receiving little to no individual support while their staff have been assisted by the furlough scheme. The Government should be supporting these businesses to remain operational rather than increasing the burdens that they face at such a fragile time.”

The chancellor’s spending review also included details on public sector pay, NHS funding and money for the devolved administrations in Northern Ireland, Scotland and Wales.

Unemployment is expected to peak at 7.5% – 2.6 million people – in the second quarter of next year. 

Check out our guide to the financial resources available to beauty businesses during the coronavirus pandemic.