New national minimum wage rates
The new National Minimum Wage (NMW) rates come into effect on 1 October 2016. The hourly rate of the NMW will increase to £6.95 (a rise of 25p) for adults 21-24 year olds. This is a rise of 3.7% over the current rate.
The rates for 18-20 year olds increase to £5.55 (a rise of 25p) and the rate for workers above the school leaving age but under 18 will increase to £4.00 (a rise of 13p). The NMW rate for apprentices increases by 3% to £3.40 (a rise of 10p).
The new NMW rates mirror the recommendations made by the Low Pay Commission (LPC) which were accepted in full by the Government. 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 National Living Wage came into effect on 1 April 2016 and has been set at £7.20 per hour. The National Living Wage is the minimum hourly rate that must be paid for those aged 25 or over. From 1 October 2016 the National Living Wage will be 25p an hour higher than the NMW rate. This is the last time we will see the NMW rate increase annually from the 1 October. From April 2017, the NMW and National Living Wage rates will be uprated in parallel.