Minimum wage to increase from 1 October

The government has accepted the independent Low Pay Commission’s (LPC) recommendations for this year’s adult and youth national minimum wage (NMW).

It also opted to increase the apprentice rate rather than freeze it, as recommended by the LPC.

From 1 October 2013:

  • The adult rate will increase by 12p to £6.31 an hour.
  • The rate for 18-20 year olds will increase by 5p to £5.03 an hour.
  • The rate for 16-17 year olds will increase by 4p to £3.72 an hour.
  • The apprentice rate will increase by 3p to £2.68 an hour.
  • The accommodation offset increases from the current £4.82 to £4.91.

Vince Cable, business secretary, said: “The independent Low Pay Commission plays a crucial role in advising the government when setting the national minimum wage every year.

“It balances wages of low-paid workers against employment prospects if the rate was set too high.

“We are accepting its recommendations for the adult and youth national minimum wage rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.

“Apprenticeships are at the heart of our goal to support a stronger economy, so it is important to continue to make them attractive to young people.

“Therefore, I am not taking forward the LPC’s recommendation to freeze the apprenticeship rate due to non-compliance, but instead I am raising it in line with the youth rates. We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board.”

David Norgrove, chair of the LPC, added: “We welcome publication of our 2013 report today and the acceptance of our recommendations on the level of the national minimum wage for adults and young people.

“We also very much welcome the government’s commitment to tackle non-compliance in the areas highlighted by us.”

Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development (CIPD), said: “The announcement to increase the minimum wage for adults by 1.9% and to increase the youth and apprenticeship rate by 1% is a welcome one.

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“We also welcome the announcement that there will be a stronger set of measures put in place to enforce the minimum wage.

“Many employers already pay more than the minimum wage, particularly for apprenticeships, but it is good to see that more will be done to ensure that the small minority of rogue businesses, which are exploiting their workers by not acting within the law, will be brought to justice.”