Accounts & Bookkeeping

Minimum wage increases on 1st October in UK

The UK Government has decided to increase the national minimum wage for an hour by 11p. The rise will be 1.8% from the current level. However, this is lower than the existing rate of inflation.
The minimum wage for workers who are under the age of 21 years will not be changed, for which a lot of criticism has been given by the union leaders. As a comparison, In 1999, the idea of minimum wage was settled at £3.60 per hour for adults. The standard is fixed by the Low Pay Commission every year.
The increase in national minimum wage to be made in October is also a recommendation of the Commission. The standard will now become £6.19 per hour.
According to the recent CPI (Consumer Price Index) measuring inflation, the cost of living in January this year rose by 3.6%. Nevertheless, the rise in minimum wage made in October is more in relation with the average increase in earnings, which increased by 1.4% in the year to January.
The unchanged minimum wage for workers below the age of 21 years means that after October:

  1. The level for workers in the age gap of 18 to 20 years remains at £4.98 per hour
  2. The level for workers aged 16 to 17 years is fixed at £3.68 per hour
  3. Nonetheless the rate for beginners and trainees will increase by 5p, becoming £2.65 per hour

The decision has been made to create a right balance between pays and jobs. Tough times are prevailing currently and sticking on to the existing rates is a very hard decision. However, raising the youth rates would not have been of great value to young people if it resulted in trouble for them to attain a job in the long run.
There are some other economists and financial advisors who believe that it is incorrect to deny young people an increase. There is no evidence to show that minimum wage would adversely affect the jobs.
The reason that firms are not hiring sufficient new workers is their lack of confidence in the government’s ability to take UK on the track for a second economic recovery. A severe danger is posed that young workers will see minimum wage work as unfair.
The decision has been taken unanimously regardless of the economic uncertainties and the various pressures on low-paid workers and businesses.
The employer’s organization is not satisfied with the judgement to increase the minimum national wage.

About Yorkshire Accountancy

We’re a modern, friendly and proactive accountancy service. Customer experience and value for money is at the heart of what we do.

Recent Posts

Google Reviews

We are 5* rated and recommended on Google. See what are customers are saying about us.

Meet The Team

We’re a modern, friendly and proactive accountancy service.

Let's Discuss How We Can Help Your Business

Our goal is to remove as much time and stress from the accounting and bookkeeping side of your business so that you can focus on what matters more to you.

© Yorkshire Accountancy Limited 2022. Registered in England  05460543 – Made by Dorks