National Minimum Wage – New Rates from 1 October 2015

1 October, 2015
by: Cripps Pemberton Greenish

On Thursday 1 October 2015, the National Minimum Wage (NMW) for adults will rise by 20 pence, following recommendations by the Low Pay Commission earlier this year.

The Business Secretary Sajid Javid has said: “As a one nation government we are making sure that every part of Britain benefits from our growing economy and today more than 1.4 million of Britain’s lowest-paid workers will be getting a well-deserved pay rise.

“The increase for apprentices is the largest in history making sure that apprenticeships remain an attractive option for young people. While the NMW will see the largest real-terms increase since 2007.”

The new rates will be:

  • £6.70 per hour for adults (an increase of 20 pence);
  • £5.30 per hour for 18 to 20 year olds (an increase of 17 pence);
  • £3.87 per hour for 16 to 17 year olds (an increase of 8 pence); and
  • £3.30 per hour for apprentices (an increase by 57 pence). This rate only applies to apprentices aged 16 to 18 and those aged 19 and over in their first year of their apprenticeships. The NMW will apply to all other apprentices according to their age.

If an employer provides free accommodation for their employees, some of its value can be counted towards the NMW. This “accommodation offset” will increase from 1 October 2015 to £5.35 (previously £5.08).

A new mandatory National Living Wage is also set to be introduced by the government from April 2016. This will apply to employees aged 25 and over and will be set at an initial rate of £7.20. We will update you on this nearer the time.