A planned living wage increase could be scrapped next year because of the coronavirus pandemic.

It was expected to rise 49p from £8.72 to £9.21 in April next year.

But now ministers are considering to put an "emergency brake" on the plan because of the financial damage caused by Covid-19.

According to the Telegraph, the UK might not be able to afford the planned pay wage increase.

Chancellor Rishi Sunak will make a decision regarding the pay when he announces the Autumn Budget.

He has set a target of making the wage the equivalent of two-thirds of the UK's median earnings in the next four years.

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Rishi Sunak will announce it in his Autumn Budget
Rishi Sunak will announce it in his Autumn Budget

It has been reported, members of the Low Pay Commission think companies cannot afford to pay an increased wage to its employees.

According to the commission, the coronavirus pandemic "clearly represents a very challenging set of circumstances for workers and employers alike, and will require us to review whether an emergency brake is required".

The commission will use the "emergency brake" on the plan if they feel the minimum wage would be "damaging for the lowest-paid workers".

Mr Sunak's target for increasing the pay was based on the UK having "sustained economic growth" over the next four years.

Last year, the national living wage was increased to £8.72 from £8.21 on December 30.

This hike was part of Prime Minister Boris Johnson's plan to "level up" the country.

However, plans were announced for the minimum wage for all workers aged 21 or over to increase to £10.50 by four years.

And those aged 25 or above are eligible for the national living wage, while those younger receive the national minimum pay.