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The National Minimum Wage is set to rise by 3 per cent after recommendations from the Low Pay Commission (LPC) were made to the Government.

The LPC recommended a further 3 per cent increase in the UK minimum wage adult rate to £6.70 an hour, following the increase from £6.31 to £6.50 in October 2014.

The adult rate applies to adults over 21 and would take effect in October. The LPC also recommended a 3.3 per cent increase in the 18 to 20 year-old rate to £5.30, a 2.1 per cent increase in the 16 to 17 year-old rate to £3.87 and a 2.6 per cent increase in the apprentice rate to £2.80.

 Age range:  Current rate  Recommended rate  Recommended increase
Adult rate £6.50 £6.70 3%
18 to 20 year-olds £5.13 £5.30 3.3%
16 to 17 year-olds £3.79 £3.87 2.1%
Apprentice rate £2.73 £2.80 2.6%

The LPC said the pace of the economic revival justified an increase that was higher than both inflation and average wage growth. Inflation has dropped to just 0.3 per cent while average weekly wages are growing at about 2 per cent a year.

The Government is yet to accept the recommendation from the LPC and will make an announcement in next month’s budget report. However, as in previous years, the recommendation is likely to be accepted and brought into legislation. Business Secretary, Vince Cable said: “If the recommendations were accepted, the value of the minimum wage would be higher than when we came into office in 2010 and we are now making good progress towards restoring the value it lost during the financial crisis.”

 

Scott began his career with Hawsons and trained as a Chartered Accountant, becoming a partner in 2015, specialising in the healthcare sector. For more details and advice, please contact Scott on [email protected] or 0114 266 7141. You can also follow Scott on LinkedIn and Twitter.

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