Ministers are considering a slower rise in the minimum wage for younger workers amid fears over rising youth unemployment. Labour had promised to equalise national minimum wage rates by the next election, arguing it was unfair that younger workers were paid less. Government sources said equalisation remained the aim but could be phased in more gradually.
Current rates pay 18- to 20-year-olds £10 an hour, while those aged 21 and over receive £12.21. Official figures show youth unemployment among 18- to 24-year-olds rose to a five-year high in the final quarter of 2025; excluding the pandemic spike, it is the highest in 11 years.
Former minister Alan Milburn, chair of the government's young people and work review, described the rise as an “existential” risk that could put “a generation on the scrapheap”. Speaking to the BBC, he said: “This is not a short-term phenomenon, it’s a long-term one. We’re seeing something dramatic changing in the labour markets.”
A Treasury source said a slower equalisation was “all but certain”, but the final decision rests with the Low Pay Commission. Ministers will submit evidence to the body within months. The slowdown would mean breaking Labour’s manifesto target of equalisation before the next election.
Business groups backed the delay. Kate Shoesmith of the British Chambers of Commerce said over a third of firms had reported that the increase would deter hiring. “It would ease the pressure on firms and allow them to give young people a chance to get a foot on the career ladder.” However, Andy Prendergast of the GMB Union called the suggestion that equalisation destroys jobs “nonsense”, arguing employers have been proved wrong repeatedly.
Chancellor Rachel Reeves dodged questions on the policy during a supermarket visit, saying the government recognised “challenges” and pointed to existing incentives such as the apprenticeship rate and national insurance exemptions for young workers.
