Chancellor John Healey is expected to announce a 3.9% increase to the National Living Wage in his upcoming Budget, raising the hourly rate from £12.71 to £13.20. The move follows recommendations from the independent Low Pay Commission and outstrips current inflation, which is running at 3.5%.
New Rates for Workers
The National Living Wage, for workers aged 21 and over, will rise by 3.9% (an increase of 49p), moving from £12.71 to £13.20 an hour. The National Minimum Wage, for workers aged 18 to 20, will also increase by 3.9% (an increase of 42p), moving from £10.85 to £11.27 an hour.
Policy Shift on Youth Rates
A policy shift on youth rates effectively slows down larger planned increases for younger workers and pauses Labour’s manifesto commitment to eliminate the lower youth age bands during this parliament. This follows concerns from business groups regarding youth employment pressures.
Business Reaction
Ed Woodall, chief executive of the Association of Convenience Stores (ACS), said: “Retailers have faced an unprecedented rise in employment costs over recent years and many have had no choice but to respond by reducing paid hours, delaying investment and becoming more cautious about recruitment.”
“Local shops will welcome a more restrained approach to minimum wage increases, helping to protect jobs, maintain opportunities for younger workers and support the government’s growth ambitions.”
