The National Minimum Wage is set to rise to £12.21 an hour next year – equating to an extra £1,400 every year. Chancellor Rachel Reeves announced the boost increase ahead of today’s Autumn Budget, which will unveil the Government’s future spending plans across the next year.
The 6.7% boost will come in April 2025 to mark the new financial year. Aside from this, workers aged 18 to 20 will experience a historic increase in the National Minimum Wage, leaping up from £8.60 per hour to £10.00 per hour.
This £1.40 boost represents the largest increase in the rate on record, potentially adding £2,500 to the annual earnings of full-time younger workers eligible for this rate, BirminghamLive reports.
The hikes for next year are am addition to the Government’s plans to enhance workers’ rights, which, according to the Treasury, could increase the earnings of the lowest-paid workers by up to £600 annually. This comes after the new Government’s directive to the Low Pay Commission to consider the cost of living when suggesting alterations to the National Minimum Wage.
Speaking on the minimum wage boost, Reeves said: “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.” Business Secretary Jonathan Reynolds added: “Good work and fair wages are in the interest of British business as much as British workers.
“This Government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth.” Hilary Jones, Ethics Director at Lush Cosmetics, commented on the wage increase saying: “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.”
The Autumn Budget, detailing the Government’s future spending plans, will take place at 12:30pm on Wednesday, October 30.
While the specific details of the speech remain unclear, the Chancellor previously said that ‘difficult decisions’ are a must in order to ‘restore economic stability’ in the UK. This follows accusations that the Conservatives left behind a £22 billion black hole in ‘unfunded pressures’ which the new Government has now inherited.
In August, Prime Minister Sir Keir Starmer also warned of a ‘painful’ Autumn Budget while stating: “I’ll have to turn to the country and make big asks of you to accept short-term pain for long-term good.”