Haulage bosses could be facing a £1.5bn increase in their staff wage bills within weeks once the government’s new national living wage (NLW) kicks in, according to digital marketplace SNAP.

Last year, Chancellor Jeremy Hunt accepted the recommendation by the Low Pay Commission to end poverty pay and announced the largest ever cash increase in April.

The Department for Business and Trade estimated that 2.7 million workers would directly benefit from the increase.

It means the NLW will rise by nearly 10% and SNAP claimed the haulage industry was now facing a “tipping point” with a lack of drivers to keep up with increased demand and the biggest reason for this dearth being poor salaries.

Average pay for HGV drivers in the UK is £15.47 an hour and SNAP said if this was increased in line with the NLW increase to £17.28 then bosses would have to fork out an extra £1.5bn in wages.

However, it added that if wages did rise then retention rates were likely to increase and prevent transport companies from spending even more on recruitment and training.

SNAP said getting new drivers into the industry was crucial given that over half (55%) of existing employees were aged between 50-64, meaning that many truckers would be retiring in the next decade.

“There has long been the challenge of retaining HGV drivers in the UK, and when you combine this with the challenges faced by Brexit and an increase in demand for delivery services since the pandemic, the industry naturally becomes unsustainable,” said Myra McPartlin, head of commercial at SNAP.