National Minimum Wage

The national minimum wage is an important cornerstone of Government strategy aimed at providing employees with decent minimum standards and fairness in the workplace.

It applies to nearly all workers and sets hourly rates below which pay must not be allowed to fall. It helps business by ensuring companies will be able to compete on the basis of quality of the goods and services they provide and not on low prices based predominantly on low rates of pay. The rates set are based on the recommendations of the independent Low Pay Commission.

The National Minimum Wage has increased again from October 2006

The minimum wage is a legal right which covers almost all workers above compulsory school leaving age. There are different minimum wage rates for different groups of workers as follows:

The main rate for workers aged 22 and over increased on 1 October 2006 to £5.35 an hour from £5.05 an hour.
The development rate for 18-21 year olds increased to £4.45 an hour from £4.25 an hour
The development rate for 16-17 year old increased to £3.30 an hour from £3.00 an hour
On 1 October 2006 the rate of the accommodation offset increased to £29.05 per week (£4.15 per day) from £27.30 per week (£3.90 per day)

It is important to note that these new rates only apply to pay reference periods beginning on or after the date they came into law.

From 1 October 2007 the National Minimum Wage will increase again as follows. Adult rate (workers aged 22 and over) will increase to £5.52.

Development rate for 18-21 year olds will increase to £4.60.

Development rate for 16-17 year olds will increase to £3.40

The rate for the accomodation offset will increase to £30.10 per week (£4.30 per day).

From 1 October 2006, the Employment Equality (Age) regulations abolished the Older Workers Development Rate and remove the age limit on the apprenticeship exemption.

16 and 17 year olds rate

The Government accepted the Low Pay Commission's recommendations for a new rate for 16 and 17 year olds (above compulsory school leaving age)* in their 2004 report.

£3.00 per hour from 1 October 2004. This increased to £3.30 in October 2006

NB: 16 and 17 year old apprentices are exempt from the young workers rate.

*Compulsory School Age

In England and Wales: a person is no longer of compulsory school age after the last Friday of June of the school year in which their 16th birthday occurs.
In Northern Ireland: a person is no longer of compulsory school age after the 30th June of the school year in which their 16th birthday occurs.
In Scotland: pupils whose 16th birthday falls between 1st March and 30th September may not leave before the 31st May of that year. Pupils aged 16 on or between 1st October and the last day of February may not leave until the start of the Christmas holidays in that school year.

For further information or if you think you are being underpaid, call the minimum wage helpline on 0845 6000 678

To check on how the National Minimum Wage applies to you (or your staff), telephone the National Minimum Wage Helpline on 0845 6000 678. This is also the number to ring if you think you are being underpaid and wish to make a complaint. All complaints about underpayment of the National Minimum Wage are treated in the strictest confidence and callers may remain anonymous if they wish to do so.

If you have an unanswered question on general policy you can email the national minimum wage policy team here at the DTI. However, queries about the application of the national minimum wage or about individual cases should be directed to the helpline.

DTI is considering the position of Councils under their statutory powers to provide social housing. We are considering an amendment to our regulations to put beyond doubt the position of Councils where they provide social housing to their workers. The aim is to clarify that the accommodation offset is not applied where councils provide social housing to their workers.