Millions of workers to get pay increase as national minimum wage rises

Millions of workers will be given a pay rise next year as the national minimum wage increases by 6.7%.

The minimum wage will rise from £11.44 to £12.21 an hour in a pay boost worth £1,400 a year for eligible full-time workers.

The increase, recommended by the Low Pay Commission, marks the first step towards a single adult rate but still falls short of the £12.60 per hour UK living wage calculated by the Living Wage Foundation.

Under the plans, the minimum wage will rise by £1.40 per hour and will come into force from April 2025.

It’s estimated that over three million workers will receive the pay increase after an increase.

The new rates follow the Government’s instructions to the Low Pay Commissions to factor in the cost of living when recommending changes to the minimum wage.

The minimum wage for 18-to 20-year-olds will also rise from £8.60 to £10 an hour, the largest increase in the rate on record, the Chancellor has announced.

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The increase will also mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year.

Scotland secretary Ian Murray said the changes are the “beginning of the change Scotland needs to see”.

“Labour’s plans to make work pay will deliver a pay rise for Scotland, with the biggest increase for young workers on record, as well as more rights and security at work for everyone”, he said following the announcement.

“These changes will help 200,000 of the lowest-paid workers in Scotland.

“This is the change Scotland voted for and the beginning of the change Scotland needs to see. The budget tomorrow will herald an era of growth for Scotland.”

Deputy prime minister Angela Rayner, one of the key supporters of Labour’s Employment Rights Bill, said: “A proper day’s work deserves a proper day’s pay.

“Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18-20-year-olds on record.”

Chancellor of the Exchequer Rachel Reeves commented: “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.”

The minimum hourly wage for an apprentice is also boosted next year. An 18-year-old apprentice in an industry like construction will see their minimum hourly pay increase by 18.0%, from £6.40 to £7.55 an hour.  

The increases will mean around 3.5 million workers will receive a pay rise.

Paul Nowak, general secretary of the TUC, said the Government was “delivering on its promise to make work pay”.

He said: “This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high.

“Low-paid workers spend more of their earnings in their local economies – so boosting their pay packets will benefit local businesses too.”

He also welcomed plans to align the minimum wage for younger people with the adult rate, saying younger workers faced a “huge pay penalty” due to an “outdated and discriminatory system.”

However, the Low Pay Commission warned that some businesses were beginning to struggle with increases in the minimum wage, which has risen faster than inflation over recent years.

Baroness Philippa Stroud, chairwoman of the Low Pay Commission, said: “The Government have been clear about their ambitions for the national minimum wage and its importance in supporting workers’ living standards.

“At the same time, employers have had to deal with the adult rate rising over 20% in two years, and the challenges that has created alongside other pressures to their cost base.”

She added: “The data show some signs of employers finding it harder to adapt to minimum wage increases.”