Government approves new £6.08 national minimum wage

The Government has accepted the Low Pay Commission’s (LPC) recommendations for an increase in national minimum wage rates. The adult minimum wage rate will increase by 15p to £6.08 an hour, a rise of 2.5%, which bucks the trend for current salary increases.

In addition to the increased adult rate, the following will also be introduced:

  • The rate for 18- to 20-year-olds will increase by 6p to £4.98 an hour;
  • The rate for 16- to 17-year-olds will increase by 4p to £3.68 an hour; and
  • The rate for apprentices will increase by 10p to £2.60 an hour.

The increases will come into effect on 1 October.

Business Secretary Vince Cable said: “More than 890,000 of Britain’s lowest-paid workers will gain from these changes. They are appropriate – reflecting the current economic uncertainty while at the same time protecting the UK’s lowest-paid workers. I would like to thank the LPC for doing a good job in difficult circumstances.”

Sheila Attwood, XpertHR pay and benefits editor, said: “The 2.5% increase in the adult rate of the national minimum wage from October 2011 is above the current going rate of pay settlements, which XpertHR recorded at 2.3% in March 2011. Overall, private sector employers are predicting a median 2% pay rise for 2011. Pay increases across the board are pitched well below the rate of inflation, however, with price increases on the retail prices index (RPI) measure running at 5.5%.”

David Norgrove, chairman of the Low Pay Commission, said: “We welcome the Government’s acceptance of our recommendations. The commission was again unanimous, despite all the economic uncertainties. We believe we have struck the right balance between the needs of low-paid workers and the challenges faced by businesses.”

For more information on the increase, read Sheila Attwood’s post on the XpertHR Pay Intelligence blog.

XpertHR also has a wealth of information and data on pay and benefits.

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