The National Minimum Wage (NMW) will rise by 20p an hour in October to £6.70 – an increase of just over 3%.

The National Minimum Wage (NMW) will rise by 20p an hour in October to £6.70 – an increase of just over 3%.
 

 

 

 


In February the Low Pay Commission (LPC) recommended the move which will be the largest real-terms increase in the NMW since 2007
It would also take its estimated real value three-quarters of the way back to its highest ever level.
 
This recommendation was applauded at the time by the employers' organisation the Confederation of British Industry (CBI).
 
However, the government rejected the LPC's recommendation for the apprentice rate, instead choosing to boost it by 57p to £3.30 an hour - the largest ever increase for apprentices.
 
The Department for Business, Innovation and Skills said that by implementing a rate higher than the LPC's recommendation, the government intended that apprenticeships would deliver a wage that was comparable to other choices for work.
 
From 1 October 2015:
the adult rate will increase by 20p to £6.70 per hour,
the rate for 18- to 20-year-olds will increase by 17p to £5.30 per hour,
the rate for 16- to 17-year-olds will increase by 8p to £3.87 per hour,
the apprentice rate will increase by 57p to £3.30 per hour,
the accommodation offset increases from the current £5.08 to £5.35.
 
The announcement has been criticised by trade unions for not going far enough to reflect how badly affected low paid people have been during the recession, and by the British Chambers of Commerce (BCC) for being too steep.
 
Trades Union Congress general secretary Frances O'Grady said: "For the low paid to get a fair share of the recovery, this was a year in which we could have had a much bolder increase in the minimum wage.
 
"With one in five workers getting less than a living wage, this is nowhere near enough to end in-work poverty. Britain's minimum wage workers should be very fearful of the billions of pounds of cuts to government help for the low paid that the Chancellor is planning if re-elected.
 
"Apprentices will welcome the increase to their minimum wage, which will reduce the shortfall in their minimum pay relative to 16 and 17 year-old employees. But there really shouldn't be a gap at all."
 
BCC director general John Longworth added: "It is encouraging that the government has confirmed the Low Pay Commission's recommended increase to the National Minimum Wage. However, it is concerning that the government appears to have rejected evidence-led policy making, by introducing a significantly higher apprenticeship rate than was recommended by the commission.
"Most businesses value their apprentices highly, and already pay them significantly above the apprenticeship minimum wage rate.
 
Nonetheless, it is inappropriate for government to interfere with an established rate setting system and, at a time when all political parties are promising more apprenticeships, this wage increase could negatively impact demand for apprenticeships among those firms that are only just getting by.
 
"We want to see a greater focus on encouraging firms to invest in training and supporting young people as they begin their careers - that's how we improve the skills of young people and prepare them for fulfilling and well-

Posted: Wed 18 Mar 2015
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