The government has confirmed its plans to increase minimum wage to £6.50 in October 2014. This is the largest increase in minimum wage since 2008 and will be welcomed by low paid workers.

The new minimum wage increases come into effect on the 1st of October 2014, and are detailed as follows:

  • 19p (3 per cent) increase for those over the age of 21. From £6.31 to £6.50 per hour.

  • 10p (2 per cent) increase for 18 to 20 year olds. From £5.03 to £5.13 per hour.

  • 7p (2 per cent) increase for 16 to 17 year olds. From £3.72 to £3.79 per hour.

  • 5p (2 per cent) increase for apprentices. From £2.68 to £2.73 per hour.

One million UK employees could see their take home pay increase by up to £355 a year, in line with recommendations from the independent body, the Low Pay Commission. The LPC’s recommendations also included plans to continue to increase minimum wage over the next few years, with similar larger than average decreases.

While this is positive for the nation’s workforces, many of whom are struggling with rises in the cost of living, these increases don’t add up to chancellor George Osborne’s suggestion. Last January he said that national minimum wage should be increased to £7 per hour for anyone over the age of 21.

However, from the point of view of employers, this move is manageable, the LPC said. It is a good compromise for workers and companies alike, as it allows businesses to pay more without the potential for costing jobs.

Business secretary Vince Cable urged companies to think about all the members of their workforce, in addition to those on minimum wage, so everyone could reap the benefits of the increase as the country moves further out of recession. .

Employees can find out more about minimum wage rates and eligibility here.