Pay boost for millions of workers next year
The Chancellor has revealed plans to increase wages for more than 3 million employees next year, with the National Living Wage set to go up by 6.7%. This change means that eligible full-time workers could see an annual pay increase of £1,400, making a substantial step toward establishing a true living wage. Additionally, the National Minimum Wage for those aged 18-20 will rise by £1.40 per hour, marking the biggest increase ever recorded and representing an initial move toward a unified adult wage rate.
More than 3 million employees will see a salary increase as the Chancellor has announced that the National Living Wage will rise from £11.44 to £12.21 per hour starting in April 2025.
The 6.7% rise, amounting to £1,400 annually for qualifying full-time employees, represents an important move towards fulfilling our pledge to ensure that the minimum wage truly reflects a living wage.
The National Minimum Wage for those aged 18 to 20 is set to increase from £8.60 to £10.00 per hour, marking the largest hike in history. This £1.40 rise will lead to an annual pay boost of £2,500 for full-time younger employees who qualify for this rate. This change is a significant move towards unifying the National Minimum Wage and the National Living Wage into a single adult wage, a process that will unfold gradually.
This decision comes just before tomorrow's Budget, which will lay the groundwork for important changes to improve the NHS and strengthen the country, all while making sure that everyday workers don’t see their taxes increase on their paychecks.
This initiative is part of the government's dedication to supporting businesses, workers, and economic growth. It represents an essential component of the strategy aimed at increasing earnings, with the Employment Rights Bill expected to raise the incomes of the lowest-paid employees by as much as £600 annually.
The initiative aims to enhance productivity, resulting in a skilled workforce that is prepared to support our primary goal of stimulating economic growth. This growth will generate decent jobs and opportunities across the entire nation, benefiting everyone instead of just a select few.
Chancellor of the Exchequer Rachel Reeves stated:
This Government has committed to providing a true living wage for employees. The increase in pay for millions of workers is an important move in fulfillment of that commitment.
Business Secretary Jonathan Reynolds stated that:
Fair pay and quality work benefit both British businesses and their employees.
This administration is positively impacting people's lives by recognizing that investing in the workforce enhances productivity, builds resilience, and ultimately creates a more robust economy ready for expansion.
Deputy Prime Minister Angela Rayner stated:
A fair day's labor warrants a fair day's compensation.
Our adjustments will lead to a salary increase that will assist millions of low-income individuals in meeting their basic needs, while also delivering the highest rise ever for young people aged 18 to 20.
Next year, the minimum pay for apprentices will rise as well. For example, an 18-year-old apprentice working in fields such as construction will experience an increase of 18.0% in their hourly wage, going up from £6.40 to £7.55 per hour.
These raises will result in a total of 3.5 million employees getting a pay boost this year. This aligns with the suggestions made by the Low Pay Commission, which had its advisory role updated by government officials in July to take the rising cost of living into account.
Hilary Jones, the Director of Ethics at Lush Cosmetics, stated:
The team at Lush who create and sell our products play a vital role in our success. That's why we dedicate ourselves to following the fair living wage rates set by the Living Wage Foundation each year. This ensures our pay is fair and enables our employees to meet their needs for a fulfilling life, rather than just getting by. In today's challenging economic climate, where living costs are climbing, it's encouraging to see the Government raise the minimum wage to align more closely with these rates, providing support for the hardest-working and most vulnerable individuals in the UK.
Baroness Philippa Stroud, who leads the Low Pay Commission, stated:
The government has made their goals for the National Minimum Wage very clear, emphasizing its role in helping maintain a decent standard of living for workers. However, employers have faced difficulties with the adult wage increasing by more than 20% in just two years, adding to the challenges they already face in managing their overall costs.
Our responsibility is to strike a balance between these factors, making sure that the National Living Wage (NLW) offers a just salary for those earning the least, while also considering economic conditions. These rates guarantee an actual pay rise for the lowest earners. Young workers will experience significant boosts in their minimum pay, helping to close the gap that has developed compared to the adult wage over the years.
