The Low Pay Commission (LPC) has recommended to the Government that the adult rate of the National Minimum Wage (NMW), which applies to workers aged 21 and over, should rise by 3% from £6.50 to £6.70 from 1 October 2015. The LPC has stated that its aim is to advise on a rate that protects as many low-paid workers as possible without damaging jobs or the economy and so it has carefully weighed the risk of doing too little to raise the earnings of the lowest paid against the risk of recommending more than business and the economy can afford. If accepted by the Government, this would represent the largest real-terms increase in the NMW since 2007, taking its estimated real value three-quarters of the way back to its highest ever level. 

As well as its recommendation for the adult rate, the Low Pay Commission has also recommended:

• An increase of 3.3% from £5.13 to £5.30 in the youth development rate, which applies to 18-20 year olds.
• An increase of 2.2% from £3.79 to £3.87 in the 16-17 year old rate.
• An increase of 2.6% from £2.73 to £2.80 in the apprentice rate, which applies to all apprentices in year one of an apprenticeship, and 16-18 year old apprentices in any year of an apprenticeship.
• An increase of 27p in the accommodation daily offset from £5.08 to £5.35. The offset is the one benefit-in-kind that can count towards the NMW. This is the maximum daily sum employers who provide accommodation can deduct towards those costs.

The Government will now consider whether to accept the LPC’s recommendations.