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National minimum wage

The National Mimimum Wages applies to nearly all workers and sets hourly rates below which pay must not be allowed to fall. It helps business by ensuring companies will be able to compete on the basis of quality of the goods and services they provide and not on low prices based predominantly on low rates of pay. The rates set are based on the recommendations of the independent Low Pay Commission.

The National Minimum Wage has increased again from October 2006

The minimum wage is a legal right which covers almost all workers above compulsory school leaving age. There are different minimum wage rates for different groups of workers as follows:

    • The main rate for workers aged 22 and over increased on 1 October 2006 to £5.35 an hour from £5.05 an hour.  
    • The development rate for 18-21 year olds increased to £4.45 an hour from £4.25 an hour
    • The development rate for 16-17 year old increased to £3.30 an hour from £3.00 an hour 
    • On 1 October 2006 the rate of the accommodation offset increased to £29.05 per week (£4.15 per day) from £27.30 per week (£3.90 per day)

It is important to note that these new rates only apply to pay reference periods beginning on or after the date they came into law.

From 1 October 2007 the National Minimum Wage will increase again as follows. Adult rate (workers aged 22 and over) will increase to £5.52.

  • Development rate for 18-21 year olds will increase to £4.60.
  • Development rate for 16-17 year olds will increase to £3.40
  • The rate for the accomodation offset will increase to £30.10 per week (£4.30 per day).

From 1 October 2006, the Employment Equality (Age) regulations abolished the Older Workers Development Rate and remove the age limit on the apprenticeship exemption.

16 and 17 year olds rate

The Government accepted the Low Pay Commission's recommendations for a new rate for 16 and 17 year olds (above compulsory school leaving age)* in their 2004 report.

  • £3.00 per hour from 1 October 2004. This increased to £3.30 in October 2006
  • NB: 16 and 17 year old apprentices are exempt from the young workers rate.