Minimum wage rate increases from 1 October 2016 | EEF

Employment law – Minimum wage rate increases from 1 October 2016

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The government accepted the Low Paid Commission’s (LPC) recommendations for increases to national minimum wage (NMW) rates effective from 1 October 2016

UK employees aged between 21 and 24 are now entitled to receive a statutory minimum wage of £6.95 per hour. This represents a 3.7 per cent increase from the previous rate of £6.70.  Those aged 18 to 20 enjoyed a slightly higher increase of 4.7per cent, moving from a minimum rate of £5.30 to £5.55 per hour.  The 16-17 year old rate increased from £3.87 to £4.00 per hour and the apprentice rate rose by 10p per hour to £3.40.

These changes mark the first increases to the NMW since the national living wage (NLW) came into force in April.  The NLW, payable to those ages 25 and over, (referred to in the Government’s press release announcing the above NNW increases as being ‘in effect a fifth minimum wage rate’), remains static at £7.20 per hour.

The LPC will make recommendations this autumn in respect of an increase in the NLW in April 2017.  On introduction of the NLW, the then Chancellor, George Osbourne set a target for raising the NLW to 60% of median earnings by 2020 – which could be £9.00.   

See EEF table of Current rates and limits


Principal Legal Adviser

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