The National Living Wage for people aged 21 or older will rise by 6.7% from £11.44 an hour to £12.21, Rachel Reeves has confirmed in the Budget.
The Chancellor also confirmed the National Minimum Wage for people aged between 18 and 20-years old will rise by 16% from £8.60 to £10, as recommended by the Low Pay Commission.
Reeves had announced the increases on Tuesday as she revealed they will take effect from April 2025.
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The Chancellor had exceeded the recommendations of the Low Pay Commission earlier this year in terms of the National Living Wage to increase the figure by 5.8% to £12.10.
The Low Pay Commission is an independent body that advises the government, although its remit is set by the government of the day.
The government said a full-time worker aged 21 and older will earn an extra £1,400 a year following the changes.
Apprentices will receive the largest pay bump, with Reeves confirming their hourly pay will increase from £6.40 to £7.55.
The Chancellor said these increases are “a Labour policy to protect working people, being delivered by a Labour government once again”.
The increase in Minimum wage for workers aged between 18 and 20 is part of government efforts to create in the future a single minimum rate for all adults instead of the current tiered system.
Their pay bump from £8.60 per hour to a flat £10 means a full-time worker will get an extra £2,500 in a year, the government says.
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Ms Reeves said on Tuesday: “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.”
Deputy Prime Minister Angela Rayner had 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-year-olds on record.”
By Will Conroy
