Healey ‘to announce UK minimum wage will rise by nearly 4%’ in new boost for workers
Chancellor John Healey is expected to announce a nearly 4 per cent rise in the UK’s minimum wage, with the National Living Wage for workers aged 21 and over set to reach about £13.20 an hour. If confirmed in Wednesday’s Budget, the changes would begin in 2027 and would matter particularly for younger workers, whose minimum wage is expected to rise at a similar rate to that of older workers.
The reported increase would take the rate for 18 to 20-year-olds from £10.85 to around £11.27 an hour, ending a pattern of larger percentage rises for younger employees. The Low Pay Commission estimated in April that the adult rate would need to reach about £13.18 in 2027 to keep pace with expected average pay growth. The article also reports other anticipated Budget measures, including reduced tariffs on some supermarket goods and a 55p mileage rate for work driving, for the first 10,000 miles.
In short
- The adult minimum wage is expected to rise 3.9 per cent to about £13.20.
- Rates for 18 to 20-year-olds may rise to around £11.27.
- The reported changes would take effect in 2027.
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The case for
A near 4 per cent rise would help low-paid workers keep up with rising wages and living costs, while raising the 18 to 20 rate at a similar pace could narrow the gap between younger and older workers. Supporters may also argue that a predictable, evidence-informed increase gives workers more security and recognises their contribution.
The case against
Employers, particularly smaller businesses and labour-intensive sectors, may argue that higher wage costs could make it harder to recruit, retain staff or absorb other expenses, with some costs potentially passed on to customers. They may also question ending larger percentage rises for younger workers, since a smaller gap can make entry-level jobs less affordable to employers and reduce opportunities for young people.
Explained simply
The UK has legal minimum hourly pay rates, which vary by age and apprenticeship status. The National Living Wage is the minimum rate for workers aged 21 and over; younger workers have separate rates, although the government has been moving towards bringing them closer together.
The Low Pay Commission advises the government on these rates, taking account of factors such as pay growth and the effects on jobs and businesses. Changes to minimum wages affect millions of workers’ earnings, as well as the costs faced by employers, particularly in sectors with many lower-paid jobs.