Chancellor John Healey has confirmed a pay rise of up to £1,011 for around two million workers as part of his Budget statement to the House of Commons. The increase, which applies to both the National Living Wage and the National Minimum Wage, was set at 3.9%.
Who benefits from the wage increase
The National Living Wage, which covers workers aged 21 and over, is currently £12.71 per hour and will rise in April 2027. According to the Treasury, many full-time staff work 170 hours each month on average, meaning someone on the Living Wage earns £2,160.70 per month, or £25,928.40 per year. A 3.9% increase would amount to a pay rise of £1,011.21.
Workers aged 18 to 20 are entitled to the National Minimum Wage of £10.85 per hour, or £22,134 per year if they work full-time. They will receive a pay rise of £863.23.
Policy reversal on young workers
About two million people are currently paid either the Living Wage or the Minimum Wage and are set to benefit from the change. The Chancellor has ended the policy of his predecessor, Rachel Reeves, who had increased the minimum wage for young workers faster than the living wage for those aged 21 and over. Business leaders had warned that her approach made it harder to employ young staff, and Mr Healey's policy marks a significant reversal.
Other Budget measures announced
Delivering his Budget in Parliament, Mr Healey said: "To help with the weekly shop, I am suspending tariffs on over 100 supermarket products to keep prices down."
He also outlined measures for pensioners, ex-mineworkers, and carers, adding: "And for 2.3million of our lowest-paid workers, I am increasing both the National Minimum Wage and the National Living Wage by 3.9%."
