UK workers to see pay rise as Labour boosts national minimum wage, impacting 3.5 million
by Kathryn Riddell, Ashley Cowburn, Levi Winchester · ChronicleLiveChancellor Rachel Reeves has unveiled plans for a significant pay rise for millions of low-paid workers by boosting the national minimum wage.
On the brink of Labour's first Budget in almost 15 years, the Chancellor declared a rise of 6.7% starting from April 2025.
Under this new plan, the rate for over-21s will leap from £11.44 to £12.21 an hour, equating to an annual increase of around £1,400 for a full-time employee. Deputy PM Angela Rayner pronounced: "A proper day's work deserves a proper day's pay."
For younger workers below the age of 21, the minimum wage is set to rocket from £8.60 to £10 per hour—a record-breaking rise of £1.40.
The Treasury has confirmed that such changes will affect some 3.5 million workers and represents the "first step" towards establishing a unified adult wage rate. Within the election manifesto which propelled them to victory, Labour had committed to ensuring the minimum wage would meet the standards of a "genuine living wage" and pledged to abolish age-related pay discrepancies.
Ms Reeves said: "This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise", reports the Mirror.
Echoing her remarks, Deputy PM Rayner added: "A proper day's work deserves a proper day's pay. Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record."
Paul Nowak, General Secretary of the Trades Union Congress (TUC), has welcomed the government's efforts, saying: "The government is delivering on its promise to make work pay. This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high."
Jon Richards, UNISON assistant general secretary, also commented on the positive impact of the wage increase: "This much-needed boost will see millions of workers struggling a little less from next spring. With more in pay slips, hard-earned cash will go further, easing the pressure on stretched household finances.
"Many of the employees delivering essential services and caring for those unable to look after themselves will benefit from the rise. They'll be able to spend more within their communities, helping local economies grow."
He also noted that the new legal minimum outpaces the current rates in the NHS, universities and some other public services adding: "This will give employers multiple headaches.
"To avoid this in the NHS, the government should ditch the outdated pay review body process and start talks with unions now. This will ensure wages remain competitive for all employees, so staff don't leave the NHS."
Baroness Philippa Stroud, chair of the Low Pay Commission, which advises ministers on the minimum wage, commented: "The Government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers' living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that has created alongside other pressures to their cost base."
She added: "It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time."
The statutory minimum wage set by the Government is distinct from the voluntary Real Living Wage, which is calculated based on the actual cost of living in the UK, including food and household bills. The Real Living Wage is currently £12.60 an hour outside London and £13.85 an hour within London, and is endorsed by over 15,000 employers, such as Aviva, Everton FC, Ikea, Burberry and Lush.
If you suspect your employer has been underpaying you, the first step is to scrutinise your payslips and compare your wages against the minimum rates. If it appears you haven't been paid correctly, approach your employer first and request an investigation.
If this doesn't resolve the issue, and you're still not receiving the wages due to you, you can lodge a complaint with HMRC via GOV. UK.
If your employer continues to withhold the money you're owed, they can be penalised by HMRC. HMRC also has the power to take them to court on behalf of the worker if the employer persists in refusing to pay.
Additionally, you can lodge a complaint with the Advisory, Conciliation and Arbitration Service (ACAS) pay and work rights helpline on 0300 123 1100 if you've been underpaid.
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