Millions of Workers to Receive Pay Rise Worth Up to £1,500

Millions of workers across the UK are set to benefit from a substantial pay rise as minimum wage rates increase next year. Labour Party Chancellor Rachel Reeves has confirmed that the National Living Wage will rise by 4.7% to £12.71 per hour for workers aged 21 and over, providing full-time employees with an annual boost of approximately £900.

Younger workers aged 18 to 20 will see an even larger increase of 8.5%, raising their hourly rate to £10.85. This translates to an annual pay rise of around £1,500 for full-time workers in this age group.

The National Minimum Wage for 16 to 17-year-olds and apprenticeships will also go up by 6% to £8 per hour. In total, around 2.7 million younger and older workers are expected to benefit from these changes.

Rachel Reeves emphasized the importance of these increases, stating, “The cost of living remains the biggest challenge for working people, and many are still struggling to make ends meet. That must change. Raising the National Living Wage and National Minimum Wage ensures that those on low incomes are fairly rewarded for their hard work.”

However, some experts have voiced caution. Louise Murphy, an economist at the Resolution Foundation, warned that steep wage hikes might discourage employers from hiring young people, potentially harming their employment prospects.

Katherine Chapman, Director of the Living Wage Foundation, praised the legal minimum wage increase, describing it as a positive step to ease financial pressures on low-paid workers amid rising living costs. Yet, she pointed out that these rates still fall below the voluntary real Living Wage, which is calculated based on the actual cost of living—currently £13.45 per hour across the UK and £14.80 in London.

These changes mark a significant effort to support low-income workers, particularly young people entering the job market, as the country continues to navigate economic challenges.