Low Pay Commission

21st September 2016

National Minimum Wage: Increases from 1-Oct-16.
The Low Pay Commission today welcomed the Government’s acceptance of its recommendations for the rates of the minimum wage affecting workers under 25 and apprentices, to apply from 1 October 2016 – 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 1 April 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. It will continue to advise on the other rates on its previous basis: protecting as many low-paid workers as possible without damaging jobs or the economy.

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).

Structure, level and increases in the minimum wage:
Current level From April 2016 From October 2016 – April 2017 Increase
Adult rate (21+) NLW (25+) £7.20 £7.20 n/a
Adult Rate (21-24) £6.70 £6.95 3.7%
YDR (18-20) £5.30 £5.55 4.7%
16-17 Yr Old Rate £3.87 £4.00 3.4%
Apprentice Rate £3.30 £3.40 3%

 

Other items in Blogs
Ellen Carter
11th August 2022 Revisit your remuneration?

For many SME owner-managed businesses, the tax optimum director remuneration structure for many years has been one of a low salary accompanied by high dividends. This allows Companies to take advantage of low dividend tax rates and, in many cases, no employers national insurance to be paid by the company (if paid at the Secondary…

Jaimie King
10th August 2022 Seeing Double: New Recovery Loan Scheme begins

While one government-backed Recovery Loan Scheme (RLS) ends, another opens.   The previous RLS closed on 30th June 2022, but to follow this the government have introduced a new RLS scheme to support businesses through the out-turn of the pandemic, expected to be accessible after 1st August 2022.   The New Recovery Loan Scheme Government…

Charlie Whittle
10th August 2022 Annual Allowance for NHS pensions

What is the annual allowance? The annual allowance for the 2022/23 tax year is £40,000 and each year this is compared with your pension input amounts. Your pension input is defined as the increase or growth in the capital value of your NHS pension benefits across all pension schemes. Any growth in excess of the…

Jake Day
8th August 2022 TRS Registrations: This deadline may apply to you

  1st September 2022 – This deadline may apply to you!   If you hold property or investments on behalf of another person, HMRC may consider this as a reportable trust arrangement. This may mean that you need to register on the Trust Registration Service (TRS) before 1st September 2022.   New legislation now in…

Megan Turner
4th August 2022 Charity Commission annual return: Planned Changes

The Charity Commission has launched a consultation regarding changes to the annual return.   There are a number of new questions, taking the total questions from 36 to 52, although only 32 will be compulsory. The aim of the new questions is to make the annual return more comprehensive, by gaining information around charity’s income…

Ben Beech
3rd August 2022 MP’s call for Government to Introduce Essential User Rebate

The All-Party Parliamentary Group for Road Freight and Logistics has today (27 July 2022) urged the Government to approve the introduction of an Essential User Rebate of no less than 15 pence per litre for operators within the logistics sector to combat the effects of soaring fuel prices and inflation.   The call has come…