Low Pay Commission

21st September 2016

National Minimum Wage: Increases from 1-Oct-16.
The Low Pay Commission today welcomed the Government’s acceptance of its recommendations for the rates of the minimum wage affecting workers under 25 and apprentices, to apply from 1 October 2016 – including:

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

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 per cent 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).

Structure, level and increases in the minimum wage:
Current level From April 2016 From October 2016 – April 2017 Increase
Adult rate (21+) NLW (25+) £7.20 £7.20 n/a
Adult Rate (21-24) £6.70 £6.95 3.7%
YDR (18-20) £5.30 £5.55 4.7%
16-17 Yr Old Rate £3.87 £4.00 3.4%
Apprentice Rate £3.30 £3.40 3%

 



 
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