Millions of workers will get a pay rise from April after the Chancellor announced an increase to the National Living Wage.
The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025 – giving more than three million workers a pay boost.
The 6.7 per cent increase is worth £1,400 a year for an eligible full-time worker.
It comes in an effort from the government to make sure the minimum wage is a genuine living wage.
The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour, marking the largest increase in the rate on record.
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.”
The Chancellor will deliver her first Budget on Wednesday, as the government tries to bridge what it has called the £22 billion “black hole” in the public finances.
Deputy PM Angela Rayner said: “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.”
It comes after the Low Pay Commission, which advises the government on the national living wage, said in September it expected the level to rise to £12.10, but stronger earnings growth has fuelled a larger rise.
The minimum hourly wage for an apprentice will also be boosted next year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by 18.0 per cent, a pay bump from £6.40 to £7.55 an hour.
The national living wage was increased by Jeremy Hunt last November to £11.44 an hour, which benefited nearly three million workers.
The separate Real Living Wage, which takes into account “actual living costs”, rose last week to £12.60 for the next year, rising to £13.85 for London-based workers.
However, the Real Living Wage is voluntary, with only around half a million people currently receiving the wage.
By Emma Soteriou
