National Minimum Wage (NMW) Beats Inflation
28 October 2014
On 1 October, the National Minimum Wage rose above inflation, benefitting over one million of Britain’s lowest-paid workers.
The new rates include a 19p increase in the adult rate (from £6.31 to £6.50 per hour), as well as a 10p increase in the rate for 18 to 20 year-olds (from £5.03 to £5.13 per hour). This is the first real terms cash increase since 2008, and follows the recommendations from the independent Low Pay Commission (LPC) in March earlier this year.
Business Secretary Vince Cable has also flagged up the need for faster, affordable rate rises, and notes that the NMW provides a “vital safety net” for those on low pay and ensures that they receive a fair wage. He welcomed the LPC’s assessment that 2014 will mark the beginning of a new phase of bigger increases, provided economic conditions continue to improve.
The NMW rates from 1 October 2014, as recommended by the LPC, are as follows:
• A 19p (3%) increase in the adult rate (from £6.31 to £6.50 per hour)
• A 10p (2%) increase in the rate for 18 to 20-year-olds (from £5.03 to £5.13 per hour)
• A 7p (2%) increase in the rate for 16 to 17-year-olds (from £3.72 to £3.79 per hour)
• A 5p (2%) increase in the rate for apprentices (from £2.68 to £2.73 per hour)
Many businesses across the country employ workers on the minimum wage - these reforms will mean a pay rise by as much as £355 a year for such employees.
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