The government’s independent advisory pay body is considering scrapping the apprentice minimum wage rate.
The Low Pay Commission this week announced that it will “say more on this” issue once it has “considered new evidence” from a Department for Education survey and the body’s own commissioned research.
It admitted there was “widespread support” for the change which mean apprentices would be entitled the relevant hourly minimum wage depending on their age.
The commitment came after chancellor Jeremy Hunt’s autumn statement raised the minimum hourly pay rate for apprentices from £5.28 to £6.40. The 21 per cent increase will take effect from April 1, 2024.
Hunt also uplifted the national living wage by 10 per cent, from £10.42 to £11.44 an hour. This will apply to 21-year-olds for the first time, who will see an increase from £10.18 this year to £11.44 next year. National minimum wage rates for 18 to 20-year-olds will also bump up by £1.11 to £8.60 per hour.
In a summary of its pay recommendations, the commission said that “many stakeholders continue to tell us that the apprentice rate is too low”. The incoming apprentice minimum wage is more than £5 lower than the national living wage, and some £2 below the national minimum wage for 18-20 year olds.
Both employer and worker representatives told the commission the rate “discourages young people from choosing apprenticeships”.
The summary recognised there was “widespread support for removing the apprentice rate”, so it will “say more on this in forthcoming advice, once we have considered new evidence from DfE’s apprenticeship evaluation survey and our own commissioned research”.
But for now, the commission recommended keeping the apprentice rate aligned with the 16- to 17-year-old minimum rate.
The “large” 21 per cent increase it recommended “will go some way to reducing the gap with the NLW while maintaining a reduced rate for those employers who need it”, the commission added.
Apprentice representatives said the rise was welcome, but pointed out it is still “barely half” what the Living Wage Foundation says is needed to “even survive”.
“Whilst we welcome this first step towards a fairer, more equal share for apprentices, we see it as just that. A first step,” said a spokesperson for the National Society of Apprentices.
“We think the apprentice minimum wage has had its day. At its introduction, it was there to make sure we got paid ‘something’. The apprenticeship system was in tatters after decades of neglect.
“Now, however, the apprentice minimum wage pushes apprentices into poverty and debt.”