As of 1 October 2016, the UK Government accepted and implemented the Low Pay Commission’s recommendations to increase the National Minimum Wage for workers aged 24 and under.
These changes applied to the 2016–17 tax year and were important for employers to understand to ensure full compliance with UK wage legislation.
Below is a clear summary of the updated rates and what they meant for businesses at the time.
Updated National Minimum Wage Rates (2016–17)
From 1 October 2016, the minimum hourly rates increased as follows:
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Ages 21–24: £6.95 (up from £6.70)
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Ages 18–20: £5.55 (up from £5.30)
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Ages 16–17: £4.00 (up from £3.87)
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Apprentices: £3.40 (up from £3.30)
These increases reflected the Low Pay Commission’s aim to support younger workers while balancing affordability for employers.
What About the National Living Wage?
There were no changes to the National Living Wage for workers aged 25 and over at this time.
The rate remained at £7.20 per hour and was scheduled for review in April 2017.
Employer Responsibilities
Employers were required to:
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Apply the correct wage rates from 1 October 2016
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Ensure all eligible employees were paid at least the legal minimum
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Review payroll systems to reflect the updated rates
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Keep accurate pay records to demonstrate compliance
Failing to comply with National Minimum Wage legislation can result in penalties, back payments, and reputational damage.
Staying Compliant as Your Business Grows
Keeping up with changes to pay legislation is an important part of running a business, especially as teams grow and roles change.
While this update applied specifically to the 2016–17 tax year, it highlights the importance of regularly reviewing wage rates, contracts, and payroll processes to ensure ongoing compliance.
If managing these changes feels time-consuming or overwhelming, having the right support in place can make all the difference.
How MOMENTUM Can Help
At MOMENTUM, we support SMEs with the practical side of running a business, including admin, organisation, and compliance-related tasks.
If you need help reviewing processes, managing paperwork, or staying on top of business changes, we’re here to help.
📞 Call 01903 688789
📧 Email makeithappen@mbsmih.com