New National Minimum Wage rates announced

Posted on 18 Mar 2015 by Jonny Williamson

From October 1 2015, the adult hourly rate of the National Minimum Wage (NMW) will rise from £6.50 to £6.70, and the apprentice rate will be set at £3.30, a rise of 57p, it’s been announced.

The 3% rise to the NMW, as recommended by the independent Low Pay Commission (LPC) in March 2015 this year, is the largest real-terms increase in the National Minimum Wage since 2007 and is set to benefit more than 1.4 million of Britain’s lowest-paid workers.

However the Government rejected the LPC’s recommendation for the apprentice rate, deciding the suggested rate was too low.

The new apprenticeship rate will be set at £3.30 and represents a 20% rise, the largest ever increase in the National Minimum Wage for apprentices. By implementing a rate higher than the LPC’s recommendation, the Government reportedly intends that apprenticeships will deliver a wage that is comparable to other choices for work.

Business Secretary Vince Cable is also planning to launch the National Minimum Wage Accelerator – an online tool which will make it easier to compare rates of pay across regions, sectors and occupations.

It will take data from the annual survey of hours and earnings and display information about pay so that people are able to compare wages with others in their sector and region

From 1 October 2015:

  • the adult rate will increase by 20 pence to £6.70 per hour
  • the rate for 18 to 20 year olds will increase by 17 pence to £5.30 per hour
  • the rate for 16 to 17 year olds will increase by 8 pence to £3.87 per hour
  • the apprentice rate will increase by 57 pence to £3.30 per hour
  • the accommodation offset increases from the current £5.08 to £5.35

Tim Thomas, head of employment and skills at EEF, the manufacturers’ organisation
Tim Thomas, head of employment & skills, EEF.

Commenting on the boost to apprentice pay, EEF’s head of employment & skills policy, Tim Thomas said: “We have been calling for a boost to apprentice pay and so the 57p increase to £3.30 is the right thing to do for manufacturing.

“For manufacturers, the value of recruiting apprentices means they will continue to pay above this rate to attract and retain the very best talent. However, the LPC’s role is to determine a rate that works best for the wider economy, and so government must ensure the increase does not act as a deterrent to recruiting apprentices among other sectors.”

John Cridland, director general, CBI.
John Cridland, director general, CBI.

The CBI director general, John Cridland, commented: “The Commission struck a careful balance, helping many low-paid workers without damaging their job prospects.

“Therefore it’s disappointing that the Government has rejected the LPC’s recommendation on the apprentice rate.

“The National Minimum Wage has been one of the most successful policies of recent years thanks to the independence of the Commission – its politicisation is worrying.

“Employers must be in the driving seat when it comes to apprenticeship funding, so we welcome the announcement of the voucher system but await further details.”