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UK government accepts minimum wage rate recommendations

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Staff writer ▼ | March 15, 2016
UK low wages
Wages   The £7.20 National Living Wage

The Low Pay Commission (LPC) welcomed the Government’s acceptance of its recommendations for the rates of the minimum wage affecting workers under 25 and apprentices to apply from October 1, 2016.

For workers aged 25 and over, the Government is introducing the £7.20 National Living Wage - in effect a fifth minimum wage rate - from 1 April 2016.

The LPC will make recommendations this Autumn on the rate of the National Living Wage to apply from April 2017, bearing in mind the Government’s ambition for the rate to reach 60 percent of median earnings by 2020, subject to sustained economic growth.

It will continue to advise on the other rates on its previous basis: protecting as many low-paid workers as possible without damaging jobs or the economy.

The key focus for these recommendations was the position of 21-24 year olds because - as a consequence of the introduction of the National Living Wage - this group effectively becomes a new age band within the minimum wage (the previous adult rate - applicable to workers 21 and over - now only affects these workers).

Recommendations are:

- the effective new minimum wage for 21-24 year olds, the Government agreed that it should increase by 3.7 percent to £6.95 an hour
- an increase in the Youth Development Rate, affecting 18-20 year olds, of 4.7 percent to £5.55 an hour
- an increase in the 16-17 Year Old Rate of 3.4 percent to £4.00 an hour
- an increase in the Apprentice Rate of 3 percent to £3.40 an hour.

The National Minimum Wage is the UK’s pay floor – designed to protect low-paid workers without significantly adversely affecting employment or the economy.

The Low Pay Commission is an independent body made up of employers, trade unions and experts whose role is to advise the Government on the minimum wage.


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