National minimum wage

10 Sep National minimum wage

The new National Minimum Wage (NMW) rates will come into effect on 1 October 2015. The hourly rate of the NMW will increase to £6.70 (a rise of 20p) with effect from 1 October 2015 for adults aged 21 years and older. This is a rise of 3% and represents the largest real-terms increase in the National Minimum Wage since 2008.

The rates for 18-20 year olds will increase to £5.30 (a rise of 17p) and the rate for workers above the school leaving age but under 18 will increase to £3.87 (a rise of 8p).

The independent Low Pay Commission (LPC) was established following the National Minimum Wage Act 1998 to advise the government on the NMW. It is made up of representatives from all sides of industry. The NMW rates above that come into effect mirror the recommendations made by the LPC which were accepted in full by the Government.

From October 2015, the NMW rate for apprentices under the age of 19 or in the first year of their apprenticeship will increase by 20% to £3.30 (a rise of 57p). This increase is higher than the LPC’s recommendation. Earlier this year, the Government announced plans to create 3 million new apprenticeships by 2020.

The new National Living Wage will come into effect from April 2016 and will initially be set at £7.20 per hour for the over 25’s. This represents a rise 50p above the NMW increase coming into force in October.

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