Adult minimum wage to rise by 11p from October

Vince Cable, the Business Secretary, announced the change today.

But the rates for younger workers will be frozen at £4.98 for 18 to 20-year-olds and £3.68 for 16 to 17-year-olds. Apprentices will enjoy a 5p increase in their minimum wage to £2.65 an hour.

The changes are in line with the recommendations of the independent Low Pay Commission and come into effect on October 1.

Mr Cable said: “I believe that the recommendations of the Low Pay Commission strike the right balance between pay and jobs, and have therefore accepted all the rate recommendations. The Low Pay Commission has done a good job in difficult circumstances.

“In these tough times freezing the youth rates has been a very hard decision - but raising the youth rates would have been of little value to young people if it meant it was harder for them to get a job in the long run.”

LPC chair David Norgrove - who was today reappointed for a second four-year term - said: “We welcome the Government’s acceptance of our recommendations on the rates for the National Minimum Wage.

“The Commission was again unanimous, despite all the economic uncertainties and the different pressures on low-paid workers and businesses. We believe we have struck the right balance between the needs of these workers and the challenges faced by employers.”

The minimum wage was introduced by Labour in 1999 at £3.60 an hour for adults, and is revised each year on the basis of recommendations from the Low Pay Commission.

This year’s 11p hike for workers aged 21 and over amounts to a 1.8 per cent rise - around half of CPI inflation, which stood at 3.6 per cent in the most recent figures.

It increases the annual pay for a full-time worker on 40 hours a week on minimum wage by £228.80 to £12,875.