Minimum wage rates to rise by 7% in October

National Minimum Wage rates for adults and younger workers are to go up by over 7% in October, taking the main rate to £4.50 an hour.

There will be a similar rise in October 2004, subject to a further assessment of economic circumstances by the Low Pay Commission (LPC).

The new rate this autumn will be £4.50 (up from £4.20) for workers aged 22 and over while the 18-21 year rate goes up to £3.80 (from £3.60).

The government rejected a proposal to apply the adult rate to 21-year olds but did agree that the LPC should examine the case for a new rate payable to 16-17 year olds. This will be done in the context of a wider review looking at education and training policy and the system of financial support for young people.

The government estimates that 1.3 to 1.6 million low paid workers will benefit from the initial increase while 1.7 to 2.5 million stand to benefit from the 2004 increase.

The fourth report of the Low Pay Commission (which runs to 276 pages) can be downloaded from the LPC web site: www.lowpay.gov.uk while the government's response is available from the Department of Trade and Industry web site: www.dti.gov.uk/er/nmw