The National Minimum Wage for apprentices is set to rise by 5p an-hour to £2.73, the Department for Business, Innovation and Skills (BIS) has announced.
The 2 per cent rise will come into force on October 1.
The move, which was recommended by the Low Pay Commission (LPC) after the government asked how it could increase wages without making employment and apprenticeships unaffordable for employers, has been welcomed by business groups.
However, the National Union of Students (NUS) has said the rise was not enough to persuade more young people to take on an apprenticeship.
Joe Vinson, NUS vice-president for FE, said: “The new minimum wage for apprentices is still shockingly low.
“Our own research has shown that the current apprenticeship minimum wage could be a major deterrent for those who would otherwise consider apprenticeships — a 5p rise isn’t going to do anything to get more study leavers to take one up.
“If the government is serious about apprenticeships, it should recognise that forcing young people to choose between this paltry wage and the prospect of full-time employment at the minimum wage is bound to put people off.”
Lynne Sedgmore, executive director of the 157 Group said : “This is a welcome rise and an acknowledgement of the very important role that apprenticeships play in the future development of a skilled workforce.”
The Association for Employment and Learning Providers (AELP) welcomed the move, announced on Wednesday (March 12).
An AELP spokesperson said: “This seems to be about the right level of increase and should remind everyone employers are already making a significant contribution to the overall cost of an apprenticeship.
“We believe the wage level on its own does not constitute a barrier to entry for employers, but it has to be considered within the overall cost equation.”
The LPC’s report, published last month, also recommended an apprentice pay survey should be carried out this summer.
An apprentice pay survey was carried out in 2012, but not last year, and a BIS spokesperson confirmed it would conduct a survey this year, but she could not give a specific timetable or say if there would be any further surveys.
Nevertheless, the Confederation of British Industry’s chief policy director, Katja Hall, welcomed the rise. She said: “The government’s decision to accept the Low Pay Commission’s recommendation is a sensible one and will not put jobs at risk.”
John Allan, national chair, Federation of Small Businesses, said: “The government’s decision not to go beyond the Low Pay Commission’s recommendation is welcome.
“To help the smallest firms plan ahead, we would like the Low Pay Commission to take a longer term approach when making recommendations on future minimum wage increases.”
The adult National Minimum Wage is to rise 19p (3 per cent) to £6.50 an-hour; 10p (2 per cent) for 18 to 20-year-olds to £5.13; and, 7p (2 per cent) for 16 and 17-year-olds to £3.79.
The Association of Colleges declined to comment.