National Living Wage putting "significant" financial stress on companies

Insolvency firm Begbies Traynor says 59,608 businesses are in "significant" financial stress because of the introduction of the National Living Wage (NLW).

Living wage putting retailers under stress. Image: Pixabay
Living wage putting retailers under stress. Image: Pixabay

More than 1.8m workers saw their pay rise to £7.20/hour on 1 April. Begbies Red Flag research found almost 60,000 companies already "stretched to breaking point".

Maintaining pay differentials could also cost employers £234m in the next year, the Office of Budget Responsibility has warned, adding that 60,000 jobs could be lost.

The British Retail Consortium says NLW will cost employers £3bn a year, while the Federation of Small Businesses says 38 per cent of its members will be negatively impacted by the NLW.

Garden industry figures say NLW impacts disproportionately on the industry, with some retailers looking at raising prices or cutting staff or benefits to cope.

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