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National Minimum Wage Due to Rise

Written By On 15/04/2013

The Low Pay Commission has put forward their recommendations and Vince Cable has decided to administer most of them, but with a couple of adjustments. He proclaimed that they will take effect in six months time from October 2013.

Presently the national minimum wage for adults is £6.19 per hour and that will increase by 12 pence to £6.31. At the moment the minimum wage for 18 to 20 year olds is £4.98 and that will increase by 5 pence to £5.03 per hour.

Mr Cable said,

We are accepting the independent Low Pay Commission's recommendations for the adult and youth rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.

The LPC recommended that apprentices' rates should stay the same, but the government business secretary said that this will not be the case. He announced that they will increase by 3 pence per hour from £2.65 to £2.68.

The Secretary of State for Business, Innovation and Skills went on to say,

Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people. Therefore, I am not taking forward the LPC's recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates.

Part time students repaying tuition fee loans and maintenance loans may welcome the increase. Unlike full time students that can wait to pay back the loans until 2016 providing they earn at least £21,000, some part timers are paying while working and studying.

Although the adults' percentage rates have been increased by 1.9%, which is below the Retail Prices Index' current inflation rate of 3.2% and the Consumer Prices Index's rate of 2.8%, the British Chambers of Commerce still feels it too high. They are concerned that the extra costs will increase pressure on businesses that need to cover their expenses. However, they had a different response for 18 to 20 year olds and apprentices and called it "restrained".