The national minimum wage will go up to £12.21 an hour in April after the chancellor confirmed a 6.7% increase in October, with more than three million low-paid workers in line for a pay rise.
Currently, the minimum wage is £11.44 for those aged 21 and over, £8.60 for those aged 18 to 20, and £6.40 for under-18s and apprentices.
The change will take place from April 1. It will rise to £12.21 for those aged 21 and over, £10 for those aged 18 to 20, and £7.55 for under-18s and apprentices. These increases will mean 3.5 million workers will receive a pay rise this year in total, the government claims.
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Why is the minimum wage rising?
Chancellor of the Exchequer Rachel 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.”
Business Secretary Jonathan Reynolds added: “Good work and fair wages are in the interest of British business as much as British workers. This government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth.”
What is the reaction to the raise?
The TUC general secretary, Paul Nowak, said: “This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high.
“The independent Low Pay Commission has looked at a range of economic evidence before making this recommendation. They know employers can absorb this increase. Every time the minimum wage goes up there are some voices who predict this will drive up unemployment.
“Every time they are wrong.”
However, more than half of companies plan to raise prices by early April, according to research, which found business confidence has slumped since the Budget.
A survey of more than 4,800 firms found that 55% of them expect prices to increase in the next three months, up from 39% in a similar poll in the second half of 2024.
The research, by trade group the British Chambers of Commerce, comes after Labour announced an increase in taxes related to employing people in the October Budget.