Anyone earning less than £26,000 will get 6% pay rise after Wednesday | Personal Finance | Finance
Millions of workers across the UK are set to see a boost in their pay packet following Wednesday’s autumn Budget.
Chancellor Rachel Reeves will present her first Budget to the House of Commons tomorrow (October 30), in which Labour is expected to announce a boost to the national minimum wage.
Reports indicate that workers will get a 6% increase in the minimum wage, with younger people getting a larger increase.
The pay rise would bring the minimum wage for workers aged 21 and older to around £12.12 per hour – up from the current rate of £11.44.
It means that a worker earning the minimum wage of £12.12 working a 40 hour week for an entire year would earn £25,209.60 before tax.
Any changes to the minimum wage would follow Labour’s instruction to the Low Pay Commission, which recommends minimum wage rates, to include the cost of living in its calculations for the first time.
In 2023 and 2024, the minimum wage rose by more than 9% per year against a background of high inflation in a bid to meet the previous government’s target of raising rates to two-thirds of median earnings – a target which was met this year.
The commission last month said it expected to recommend an increase of 5.8% but it is predicted the final figure could be up to 6%.
Around 1.6 million workers are set to benefit from the increase, which would come into effect on April 1, 2025.
What is the current national minimum wage?
The minimum wage is what employers are required to pay workers by law and the hourly rate depends on your age and whether you are an apprentice.
These are the current rates for the National Living Wage (for those aged 21 and over) and the National Minimum Wage (for those of at least school leaving age):
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21 and over – £11.44
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18 to 20 – £8.60
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Under 18 – £6.40
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Apprentice – £6.40
These rates will remain the same until March 31, 2025. The rates then change on April 1 every year, which is when the expected 6% rise will take effect.
