Business secretary Vince Cable confirmed he has accepted the independent Low Pay Commission (LPC) recommendations for this year's adult and youth NMW rates.
The Government has gone against recommendations by the LPC and also increased the wage for apprentices.
The LPC had stated the apprentice rate should be frozen. It based this recommendation on concerns about level of compliance with the apprentice rate.
The following rates will come into effect on 1 October 2013:
- The adult rate will increase by 12p to £6.31 an hour
- The rate for 18-20 year olds will increase by 5p to £5.03 an hour
- The rate for 16-17 year olds will increase by 4p to £3.72 an hour
- The apprentice rate will increase by 3p to £2.68 an hour
- The accommodation offset increases from the current £4.82 to £4.91
Cable said: "The LPC plays a crucial role in advising the government when setting the National Minimum Wage every year. It balances wages of low paid workers against employment prospects if the rate was set too high.
"We are accepting its recommendations for the adult and youth National Minimum Wage rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.
"Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people. Therefore, I am not taking forward the LPC's recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates. We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board."
TUC general secretary Frances O'Grady welcomed the rise but said the Government could have done more to raise the wage even further.
"Boosting the incomes of the low-paid goes straight into the economy and wage-led growth must be part of the recovery, so we would have liked to have seen minimum wage rates go up further today, even if the Government has rightly rejected calls for a freeze," she said.
O'Grady added: "But we are pleased that ministers have increased the apprenticeship rate. This sends a positive signal about the importance of apprentices."
