More than a million people are set to get a pay rise today (1st October 2015) as the adult rate (anyone aged 21 years or over) of National Minimum Wage (NMW) has risen by 20 pence from £6.50 to £6.70 an hour. The rates have also increased for younger workers as follows:
New National Minimum Wage Rates
- 18 to 20 year olds - increase of 17 pence to £5.30 per hour
- Under 18 year olds- increase of 8 pence to £3.87 per hour
- Apprentice rate - increase by 57 pence to £3.30 per hour
This latest increase to the National Minimum Wage is the largest increase since 2007, and is set to benefit more than 1.4 million of Britain’s lowest-paid workers.
Introduction of National Living Wage
The new National Minimum Wage (NMW) rates come into effect ahead of the planned introduction of a new National Living Wage (NLW) of £7.20 an hour for over 25 year olds from April 2016. The NMW rates will still apply for workers aged 24 and under.The NLW will be raised incrementally and is expected to reach £9 an hour by 2020. This is just one of the many changes outlined in the summer 2015 budget which will come into affect in April 2016 which also includes:
Summer 2015 budget key changes
- A rise in the personal tax allowance from £10,400 to £11,000
- A rise in the 40% higher rate tax threshold to £43,000
- National Insurance employer allowance will be increased to £3,000
- The legislation of a ‘tax lock’, setting a ceiling on the current (2015-16) rates of income tax, standard and reduced rates of VAT, employer and employee (Class 1) National Insurance
- Introduction of a new £5,000 tax-free dividend allowance for all taxpayers
- Increase to the tax-free threshold for the Government’s ‘Rent a room’ scheme from £4,000 to £7,500
If you have any questions about National Minimum Wage, or any of the changes which are due to come into effect next April then please get in touch with us.
Further information on National Minimum Wage can be found on the Government website.