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Unions call for overhaul of minimum wage system to help young workers

Unions are calling for an overhaul of the minimum wage system after research suggested young workers are being left “out of pocket”.

The TUC said its analysis of official data showed that more than 700,000 workers aged 18-20 face a “penalty” of thousands of pounds a year due to being paid a lower rate of the minimum wage.

Workers aged aged 18-20 face losing out on an estimated £2,438 a year, or £47 a week, because of the lower minimum wage rate for their age group, said the TUC.

The union organisation said that paying a lower rate to younger adults is “unfair”, and that the tiered rates system must be overhauled.

The main minimum wage rate is currently £10.42 an hour for those 23 and over, £10.18 for 21 to 22-year-olds, £7.49 for 18 to 20-year-olds and £5.28 for under 18s.

From April, the minimum wage rises to £11.44 and will be extended to those aged 21 and 22.

TUC general secretary Paul Nowak said: “Everyone should be paid fairly for the job they do, but too many young workers are still being left hugely out of pocket because of outdated youth rates of the national minimum wage.

“More than 700,000 workers aged 18-20 face this pay penalty – they are getting less than older workers for doing the same job.

“Young people up and down the country are being hammered by the cost-of-living crisis – like everyone else, they need more money in their pockets now.

“That’s why we’re backing Labour’s New Deal, which has pledged to introduce a real living wage for workers as well as banning zero hours contracts which blight the lives of many young workers.

“It’s time to put an end to low pay Britain.”