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Election Special - National Minimum Wage

Posted on in Economy
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The Conservatives have promised they will create two million new jobs over the next five years. They have also promised to create three million new apprenticeships and to make the national minimum wage free of income tax. From 1 October 2015, the national minimum wage (NMW) for adults will rise by 20p per hour from £6.50 to £6.70 with the new apprenticeship rate set at £3.30 which represents a rise of 57 pence. This is the largest increase in the NMW for apprentices since this rate was introduced. This is a rate higher than the Low Pay Commission’s (LPC’s) had recommended and the Government intends that apprenticeships will provide a wage that is comparable to other choices for work.

From October 2015, the rate for 18 to 20-year-olds will rise to £5.30 per hour and the rate for 16 to 17-year-olds will be £3.87 per hour. We will issue a further reminder nearer the time.

The Conservatives will also enact legislation to the effect that no one working up to 30 hours a week on the minimum wage should ever pay income tax. The NMW will also be linked to the personal allowance. The Conservatives intend to increase the personal allowance to £12,500 by the end of the next Parliament. They also wish to ‘permanently link’ any increases in the personal allowance with increases in the minimum wage rather than linking increases to inflation. This would mean that if the minimum wage rises faster than expected, workers in this situation would still be exempt from paying income tax.

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