Legislation laid confirming new national wages

Announced at last year’s budget, the 6.7 per cent increase to the national living wage which will be worth £1,400 a year for an eligible full-time worker.

The national minimum wage for 18-20-year-olds is also set to increase by £1.40 to £10 per hour – a record increase which means full-time younger workers eligible for the rate will see their pay boosted by £2,500 a year.

An impact assessment also published today shows that these reforms will put around £1.8 billion into the pockets of workers over the next six years.

Employment rights minister Justin Madders said: “Economic growth only matters if working people are feeling the benefits. This will be a welcome pay bump for millions of workers who in turn will spend more in the real economy boosting our high streets.

“Our Plan for Change is putting money back into people’s pockets and delivering better living standards across the country.”

Chancellor of the Exchequer Rachel Reeves said: “This government promised a genuine living wage for working people that will support people with the cost of living, creating a workforce that is fit and ready to help us deliver number one mission to growth the economy.

“This pay boost for millions of workers is a significant step towards delivering on that promise.”

Deputy Prime Minister Angela Rayner added: “We’ve taken quick and sensible action to boost wages for millions of lower paid workers who are the backbone and future of our economy. 

“This is us fulfilling our promise to make work pay and improve living standards across the country, with record boosts to support young people and apprentices - our skilled workers of tomorrow.”

The national minimum wage is the minimum amount an employer must pay per hour for most workers, while the national living wage is the higher rate that applies to workers aged 21 and over.

This is the first time the national living wage has taken into account the cost of living and inflation and marks the first step towards aligning the national minimum wage for 18–20-year-olds and national living wage to create a single adult wage rate.