The Federation of Independent Retailers (NFRN) has said plans to raise the national living wage will be a “bitter blow to small businesses that are already struggling to survive”.

The statement comes after several news outlets reported that chancellor Rishi Sunak will outline a 6.6% increase to the living wage in this Wednesday’s Autumn Budget. The increase takes the hourly wage from £8.91 to £9.50 for those over 23 years old.

NFRN national president Narinder Randhawa said: “Rather than boosting many shop workers’ incomes, the proposed increase will have the opposite effect of threatening jobs in the sector.

“We would all like to pay our staff more, but the headline increase in the wage rate does not include the increase in National Insurance and pension contributions that employers also have to pay.

“Given that many of the items on sale in our 11,000 members’ stores – particularly newspapers and magazines – are price marked, retailers are unable to increase their prices to cover these additional payrolls costs.”

Randhawa said many retailers have had to reduce staff levels and hours during the pandemic.    

“This increase to the national minimum wage will only make matters worse.

“At a time when small businesses need help and support more than ever, this move by the government feels like a kick in the teeth for those that are already struggling to survive,” Randhawa added. 

However, other groups have welcomed the news.

Graham Griffiths, director of the Living Wage Foundation described the past 18 months as a “perfect storm for workers and families, with costs like fuel and energy rising and cuts to household incomes”.

He said it was good to see a significant increase in the minimum wage, which is scheduled to come into play from April 2022.

“However, the real Living Wage, unlike the government minimum, is calculated annually based on covering living costs. Next month, as part of Living Wage Week, new Living Wage rates will be announced that reflect the rising living costs we’ve all been experiencing. These rates will see a substantial gap remain between the real Living Wage and next year’s government minimum wage,” he added.