New Minimum Wage Rates

February 21, 2017

New Minimum Wage Rates

The Chancellor of the Exchequer announced in his Autumn Statement that the following changes to the National Living Wage (NLW) and the National Minimum Wage (NMW) will come into effect on 1 April 2017:

  • The NLW for those aged 25 and over will increase from £7.20 per hour to £7.50 per hour;
  • The NMW for 21- to 24-year-olds will increase from £6.95 per hour to £7.05;
  • The NMW for 18- to 20-year-olds will increase from £5.55 per hour to £5.60;
  • The NMW for 16- and 17-year-olds will increase from £4.00 per hour to £4.05; and
  • The apprentice rate of the NMW, which applies to apprentices aged under 19 or those aged 19 or over and in the first year of their apprenticeship, will increase from £3.40 per hour to £3.50.

New Rates of Statutory Pay for Parents

The rates for Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Adoption Pay (SAP) normally increase in April each year in line with the Consumer Price Index (CPI). However, a 0.1 per cent fall in the CPI in the year to September 2015 meant that the rates remained unchanged for the year commencing April 2016.

In the year to September 2016, the CPI increased by 1 per cent. Hence, the Chancellor of the Exchequer announced in his Autumn Statement that the rates will increase from £139.58 per week to £140.98 per week from April 2017.

Statutory Sick Pay

The weekly Statutory Sick Pay (SSP) rate for days of sickness absence will increase from £88.45 to £89.35.

In addition, the lower earnings limit applying to National Insurance Contributions, below which employees are not entitled to SMP, SPP, ShPP, SAP or SSP, will increase from £112 to £113 per week for the tax year 2017/2018.