The national minimum wage is to increase by 6.7 per cent next year, with more than 3 million workers in line for a pay rise, it has been announced.
The above-inflation 6.7 per cent increase — worth £1,400 a year for an eligible full-time worker — is larger than what had been predicted in the long lead in to the autumn budget, Labour’s first since returning to government.
The Treasury has also announced that the national minimum wage for 18 to 20-year-olds will rise from £8.60 to £10.00 an hour. It amounts to the largest increase in the rate on record.
The £1.40 increase means full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year.
The Department for Business and Trade estimates that over 3 million workers will directly benefit from the 2025 National Living Wage increase and that nearly 200,000 workers will benefit from the increase to the National Minimum Wage for 18–20-year-olds.
Commenting on the announcement, chancellor of the exchequer Rachel 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.”
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Business and trade secretary Jonathan Reynolds said: “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.”
Deputy prime minister Angela Rayner 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.”
Speaking on Tuesday morning, shadow work and pensions secretary Mel Stride suggested his party could back a rise in the minimum wage, then reported to be around 6 per cent.
“We’ve always, particularly through tax cuts, been on the side of lower paid people”, Stride told Sky News. “But I think what you can’t overlook is the pressure that some of this is going to be putting on businesses.”
When pressed on whether his party could back an increase to the minimum wage, Stride replied that it would “need to look at it in the round”.
Josh Self is Editor of Politics.co.uk, follow him on X/Twitter here.
Politics.co.uk is the UK’s leading digital-only political website. Subscribe to our daily newsletter for all the latest news and analysis.
