Government announces minimum wage rise for adults, 18-21 year olds and 16-17 year olds

The adult National Minimum Wage will rise from £5.52 to £5.73 in October.

The rate for 18-21 year olds will also increase from £4.60 to £4.77, and the wage for a 16-17 year old will go up from £3.40 to £3.53.

The Department for Business, Enterprise and Regulatory Reform said the increase would affect nearly one million employees.

The government has also boosted funding for enforcement of the National Minimum Wage and said it plans tougher penalties for those who underpay as part of the Employment Bill, currently before parliament.

Business secretary John Hutton said: “The National Minimum Wage remains one of the most important rights introduced by the Government in the last decade. Before it was introduced, some workers could expect to be paid as little as 35p an hour, our legislation has ensured that can no longer happen.

“I am proud of the minimum wage; it makes a real difference to the lives of many of our lowest-paid workers and protects them from exploitation. It also creates a level playing field for business and boosts the economy.”

When the National Minimum Wage was launched in 1999 the rate was £3.60. It has risen at more than the rate of inflation and the number of jobs has grown by two million in the same period.