The Low Pay Commission has recommended that the national minimum wage (NMW) should increase to £6.50 an hour from 1 October this year.
The increase from the current rate of £6.31 represents a three per cent rise. The commission is also recommending an increase in the rate for under-18s from £3.72 to £3.79 and for 18 to 20-year-olds from £5.03 to £5.13.
Announcing the recommendation on 26 February, commission chair David Norgrove said: “We have had to balance the risk of recommending more than business and the economy can afford, bearing in mind the pressures on low-paying sectors and small firms, against the risk of doing too little to start to restore the real value of the earnings of the lowest paid.
“We do believe however that the economic recovery should this year allow an increase in the real value of the minimum wage, the first increase for at least five years.
“So we are recommending that the adult rate should increase by three per cent on 1 October, from £6.31 to £6.50 an hour. This is likely to increase the number of jobs covered by the minimum wage by over a third to around one and a quarter million.”
Phil Orford, chief executive of the Forum of Private Business, a national business support group, said: “With small businesses struggling with a number of costs at present we are disappointed that the recommendation is higher than inflation, but are relieved it falls short of the much higher increases that have been called for.”
Link: Current NMW rates