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National Minimum Wage increases

19th Oct 2013

The National Minimum Wage has increased, starting from the beginning of the month.

From 1 October various changes to the UK tax and benefits system have taken effect, including an increase in the minimum wage from £6.08 to £6.19 an hour.  This is a rise of 11p per hour.

The government announced the rise in March of this year.  The increase of 1.8% is slightly lower than the typical rise in earnings and the current rate of inflation, which represents the gradually rising cost of living.

Retail Prices Index (RPI) inflation is currently at 3.2%, while the Consumer Prices Index (CPI), which is calculated differently, is at 2.8%.

The freeze in the minimum wage for those aged under 21 means that the rate for 18 to 20-year olds remains at £4.98 an hour, while the rate for 16 to 17-year olds remains at £3.68 an hour.

But the rate for apprentices has also risen by 5p, from to £2.60 to £2.65 an hour.

Meanwhile, value added tax (VAT) will now be imposed on sports drinks and hairdressers’ chairs.

The minimum wage was first introduced in 1999 at £3.06 an hour for adults.  The latest minimum wage levels reflect recommendations made to the government by the Low Pay Commission.