National Minimum Wage Update October 2015

This year we have seen the largest real-terms increase in the National Minimum Wage since 2007, and more than 1.4 million of Britain’s lowest-paid workers are set to benefit.

From Thursday 1 October 2015, the adult rate of the National Minimum Wage (NMW) has increased by 20 pence from £6.50 to £6.70 per hour, as recommended by the Low Pay Commission (LPC) in March 2015 this year.

In summary: From 1 October 2015:

  • the adult rate (21 year olds plus) 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

Year

21 & Over

18 -20

Under 18

Apprentice*

2015 from Oct

£6.70

£5.30

£3.87

£3.30

2014

£6.50

£5.13

£3.79

£2.73

*This rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.

Important Information for April 2016

Although the rise to the National Minimum Wage this year is substantial, employers still need to be aware of the planned changes in April 2016 with the introduction of the National Living Wage. This new government rate is a minimum wage premium rate for staff over 25 years old and will be introduced at £7.20 per hour.

This rate should not be confused with the Living Wage rate calculated by the Living Wage Foundation. The government rate is based on median earnings while the Living Wage Foundation rate is calculated according to the cost of living. This rate is predicted to rise to £9 by 2020. Aside from the obvious benefits to employee welfare on the business, many are concerned about the affordability of this new legislation.

Simon Wells

Business Development at Qtac Software & Outsourcing
Simon Wells has extensive understanding of the payroll process and has been working at Qtac prior to the introduction of Real Time Information and Automatic Enrolment Pensions. With experience in outsourced payroll services Simon has a unique understanding of payroll processing within a bureau environment.
Simon Wells