UK budget lifts adult minimum wage to £13.21 as pledge on younger workers stays open
The UK budget raised the adult minimum wage to £13.21 an hour and the rate for workers under 20 to £11.27, The Guardian reported. Both bands rose by 3.9%.
Before the increase, the rate for workers aged 21 and over was £12.71 an hour, and the rate for those aged 18 to 20 was £10.85, according to Reuters.
The minimum wage is the lowest hourly pay an employer can legally offer, and the rates are set each year by the government after advice from the Low Pay Commission, a body that makes recommendations on pay levels. The commission had recommended the 3.9% rise for the younger rate, a 42p increase to £11.27. It also recommended £8.31 for 16- and 17-year-olds and for apprentices, a rise of 31p.
The gap between the adult and younger rates is the central question. Labour's 2024 manifesto committed the party to closing the pay gap for 18- to 20-year-olds. The government's 2026 remit to the Low Pay Commission restated a commitment to lower the age threshold for the National Living Wage, the higher adult rate, to 18.
Speaking on the BBC's Sunday with Laura Kuenssberg programme, Chancellor John Healey said the government remained committed to equalising minimum wage rates for under-20s. He said equalisation was a question of when and how fast, not whether. He also suggested that younger workers might not receive the same minimum wage as older workers, and he did not guarantee the pledge on younger workers' pay, as the BBC and other outlets reported.
Healey said the government must keep weighing trade-offs between jobs and wages when it sets minimum wage policy. On public spending, he said he was prepared to keep planned cuts in place, some of them more than 2% a year, through to the government's 10-year plan and next year's spending review, the process that sets departmental budgets.
Chief Secretary to the Treasury Emma Reynolds said the government would set out welfare proposals in the new year and then legislate to bring down the welfare bill, the total cost of benefits paid by the state.
