UK Government accepts minimum wage rate recommendations
This is including:
- its first recommendation for the effective new minimum wage for 21-24 year olds, where the Government agreed that it should increase by 3.7 per cent to £6.95 an hour.
- an increase in the Youth Development Rate, affecting 18-20 year olds, of 4.7 per cent to £5.55 an hour.
- an increase in the 16-17 Year Old Rate of 3.4 per cent to £4.00 an hour.
- an increase in the Apprentice Rate of 3 per cent to £3.40 an hour.
For workers aged 25 and over, the Government is introducing the £7.20 National Living Wage - in effect a fifth minimum wage rate - from April 1, 2016.
The LPC will make recommendations this Autumn on the rate of the National Living Wage to apply from April 2017, bearing in mind the Government’s ambition for the rate to reach 60 per cent of median earnings by 2020, subject to sustained economic growth.
The key focus for these recommendations was the position of 21-24 year olds because - as a consequence of the introduction of the National Living Wage - this group effectively becomes a new age band within the minimum wage (the previous adult rate - applicable to workers 21 and over - now only affects these workers). ■