The British government is set to announce a minimum wage increase in the Budget, with the National Minimum Wage for 18-to-20 year-olds expected to rise by 3.9% from £10.85 to approximately £11.27 per hour. The National Living Wage for workers aged 21 and over is similarly set to increase by 3.9% to £13.20 per hour.
The smaller increase for younger workers represents a departure from the previous two years, during which the Labour government implemented a 26% wage increase for this age group in pursuit of a manifesto commitment to eliminate “discriminatory age bands” and provide all adults with equal minimum wage. Government officials stated that while the equalization pledge remains in effect, the implementation will occur gradually, with consideration given to labor market pressures and the need to balance good wages with overall employment conditions.
Union leaders have criticized the decision, with Unison’s general secretary describing the continuation of age-based wage differences as “deeply unfair” when younger workers perform identical jobs to their older colleagues. The union highlighted that 20-year-old care workers, teaching assistants, and security guards face the same living costs as their adult counterparts.
Beyond minimum wage adjustments, the government announced additional cost-of-living measures including the removal of import tariffs on approximately 100 food and household items such as baked beans, garlic, gherkins, plant-based drinks, and kerosene. Officials estimate these tariff reductions could save households up to £21 annually. Other measures include a permanent increase in the tax-free mileage allowance for work-related driving, expanded earnings limits for carers, extended paternity pay for self-employed fathers, and continued fuel duty freezes.
Opposition figures criticized the measures as insufficient, characterizing them as “cheaper gherkins” in response to families struggling with rising costs. Business representatives raised concerns that the focus on import tariff reductions does not address elevated production costs for UK-based food and drink manufacturers, particularly relating to energy expenses.
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