Minimum wage to go up 2% or 13p an hour in October

The minimum adult hourly wage will rise by 2% in October to £5.93 an hour.

The increase is in line with a recommendation from the Low Pay Commission, but it lags far behind the retail price index measure of inflation, which is generally used as a benchmark for wage rises.

That figure, for May, showed prices rising by 5.1%.

The minimum wage was introduced by the Labour government to put a floor under what employers could pay their staff.

The new rate, for adults over the age of 21, will come into force alongside a new £2.50 hourly minimum wage for apprentices.

Younger workers between the ages of 18-20 will get a 9p increase to £4.92 an hour, while 16 and 17 year-olds will get £3.64 an hour, 7p more than previously.

Prospects

The coalition government warned that the Low Pay Commission's remit for future recommendations is to include paying particular attention to the competitiveness of small firms and the employment prospects of young people.

Employment Relations Minister Edward Davey said this year's rise was right for the current state of the economy.

"The increases... will strike a balance between helping the lowest paid whilst at the same time not jeopardising their employment," he said.

The Low Pay Commission estimates that some 970,000 people stand to benefit from the increases.

Earlier this month, the so-called "London Living Wage" was increased by a higher amount of 3.3% to £7.85. almost £2 more than the new national minimum.

Mayor Boris Johnson said the rise was needed to "combat poverty" and ensure that "people are better off in work than out of work".

Source BBC