Minimum Wages

The UK National Minimum (NMW), set by the Low Pay Commission and endorsed by government, has ensured a legal floor for hourly pay since 1999. In April 2016 the Government introduced a new National Living Wage (NLW) for adults aged 25 and over. The NMW still applies for those under the age of 25.

Current rates

The new rates for 2016/17 and 2017/18 are as follows:

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
Current rate (from October 2016) £7.20 £6.95 £5.55 £4.00 £3.40*
April 2017 £7.50 £7.05 £5.60 £4.05 £3.50*

 *This rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.

NMW Accommodation Offset

In 2011 the Department for Business Innovation and Skills (BIS) conducted a consultation on the impact of the NMW Regulations accommodation offset on employed students in higher education institutions, see UCEA Updates 11:010 and 11:022.

The HE sector made a strong case to the Department that the impact on students should be viewed as an unintended consequence of the Regulations. The Government accepted that ‘the relationship between an HEI and its students was primarily educational and where an HEI employs a student on a part-time basis the relationship is not akin to the circumstances which the accommodation offset rues were designed to cover.’ See the full Government response to the consultation.

The National Minimum Wage (Amendment) (No.2) Regulations came into force from 1 October 2011 which gave effect to an exemption from the offset rules for Higher and Further Education Institutions and their students. The Regulations apply where institutions provide accommodation to a student enrolled on a full-time higher or further course with the institution.

If any institutions have direct experience of HMRC inspections into pay and offset, please do let us have feedback on this by contacting Nicola Carter.

See also UCEA Update 12:054.

Further information 

NMW - potential impact for universities (PWC)

HMRC advice and guidance on the NMW

Department for Business, Innovation and Skills advice and guidance on the NMW