Millions of workers across the UK will see a rise in wages next year as Chancellor Rachel Reeves announces an increase in the National Living Wage, boosting it by 6.7% from April 2025. This change lifts the National Living Wage from £11.44 to £12.21 per hour, providing a £1,400 annual increase for a full-time worker and moving the Government closer to its commitment of establishing a “genuine living wage” for UK workers.
The announcement also revealed a record increase in the National Minimum Wage for 18 to 20-year-olds, rising from £8.60 to £10.00 an hour. This £1.40 increase is set to provide a full-time younger worker with an additional £2,500 next year. The substantial boost is part of a broader government strategy to align the National Minimum Wage with the National Living Wage, creating a single adult wage rate over time.
Chancellor Reeves noted the wage increase as a step toward fulfilling a promise of fair pay for working individuals across the country. “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise,” she stated.
The increase will apply to around 3.5 million workers in total, following recommendations from the Low Pay Commission, which has recently expanded its remit to include the cost of living in its assessments. Baroness Philippa Stroud, Chair of the Low Pay Commission, praised the move, acknowledging the challenges faced by both workers and employers in balancing pay increases with economic pressures.
“These rates secure a real-terms pay increase for the lowest-paid workers,” said Stroud. “Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”
Deputy Prime Minister Angela Rayner expressed support for the increased rates, highlighting its importance for young workers. “A proper day’s work deserves a proper day’s pay,” she said. “Our changes will see a pay boost that will help millions of lower earners cover the essentials.”
In a statement from Business Secretary Jonathan Reynolds, he emphasised the significance of fair wages in enhancing productivity and fostering economic growth. “Good work and fair wages are in the interest of British business as much as British workers,” said Reynolds. “Investing in the workforce leads to better productivity, better resilience, and ultimately a stronger economy.”
The wage increase will impact apprentices as well, with 18-year-old apprentices in sectors such as construction seeing a pay rise from £6.40 to £7.55 per hour, an 18% increase. This adjustment reflects the Government’s wider economic priorities as it moves forward with plans to support low-wage earners and fortify the UK economy.
Hilary Jones, Ethics Director at Lush Cosmetics, welcomed the Government’s support for low-income workers, citing the importance of fair wages in the face of rising living costs. “In these tough times where the cost of living continues to rise, it is great to see the Government increase minimum wage closer to these calculations to support the hardest working and most vulnerable workers across the UK,” said Jones.
The wage increases precede the upcoming Budget, with the Government signalling further commitments to economic stability and growth, pledging to improve public services and reduce the tax burden on working individuals.