The national minimum wage is set for an increase, though workers aged 18 to 20 are expected to receive smaller raises than in previous years. Pay for these younger employees will rise in line with the rate for those aged 21 and over, yet this adjustment remains lower than the significant hikes seen in 2024 and 2025. That is a smaller rise than the 26% increase the Labour government has put in place for younger workers since returning to power in 2024. According to even after the, Rise, the rate remains below the National Living Wage for older workers, which is currently £12.71 an hour.
Labour previously pledged to eliminate “discriminatory age bands” to ensure all adults receive the same minimum pay. Business Secretary Jonathan Reynolds defended the slower progress, telling that while the equalisation goal remains, the government must balance it with broader labour market pressures. He emphasised the necessity of creating both good wages and good quality work. The manifesto pledge on equalisation still applies but we were always clear it could happen over time,” Business Secretary Jonathan Reynolds told. Of course, you want not just good wages but good work, ” he added. “It is a balance of making sure the pressures on the labour market are taken into account. According to we’re not going to say it is everything,” Reynolds told, but taken alongside the changes implemented in the summer on goods such as pasta, fruit juice and tuna, he, It would save around £500m a year. Then I want try and fix it, but if it helps around the margins and its action the government can take.
According to reported figures, the minimum wage for 18-to-20 year-olds is expected to rise by 3.9%, moving from £10.85 to approximately £11.27 per hour.
Meanwhile, the National Living Wage for older workers is set for a similar 3.9% increase, rising to £13.20. Critics remain vocal; Andrea Egan, general secretary of the union Unison, called the continued disparity “deeply unfair,” arguing that younger staff performing identical roles to older colleagues should receive equal pay. Teaching assistants and security guards do the same work as their older colleagues,” she said. “They don’t pay less in the supermarket or at the petrol pump, twenty year-old care workers.
Chancellor John Healey is scheduled to unveil the full pay structure in Wednesday’s Budget. He is also expected to introduce measures intended to provide families with “breathing space.” Speaking to Newscast, the Chancellor acknowledged that while these interventions are not transformative on a global scale, they represent practical steps to help at the margins.
To assist households, the government intends to remove import tariffs on 100 food items. Officials estimate this could save families up to £21 annually, which, when combined with existing tariff suspensions from June, would result in roughly £500m in savings per year.
Other upcoming support measures include a permanent tax-free mileage rate for work-related driving, set at 55p per mile for the first 10,000 miles and increasing to 35p for additional mileage. However, this change is not scheduled to take effect until 2030. Additionally, self-employed fathers will become eligible for two weeks of paternity pay, addressing a gap that previously excluded them from payments of up to £194 a week.
Further support includes a reform for those receiving carer’s allowance, transitioning to a taper mechanism that allows individuals to earn more before losing their benefits. This change is also slated for 2030. The government will also roll out hundreds of additional Post Office parcel drop boxes.
Finally, the government has confirmed the continuation of a 5p fuel duty discount, originally introduced in 2022. This discount will be preserved through another fuel duty freeze in the upcoming Budget. And was due to last 12 months, but has been extended ever since, that discount was first introduced in 2022.
