Increase to wages confirmed in financial statement in House of Commons
Chancellor John Healey outside No 11 before the Budget (Image: Getty)
Chancellor John Healey just announced a pay rise of up to £1,011 for two million workers. In his Budget statement, he confirmed plans to increase both the National Living Wage and the Minimum Wage by 3.9%. And that means many workers across the country will get a significant pay rise.
The National Living Wage is for people aged 21 and over. It is currently £12.71 per hour, and will now go up in April 2027 following the Chancellor’s announcement. According to the Treasury, many full-time staff work 170 hours each month on average. That would mean someone on the Living Wage is paid £2,160.70 each month, or £25,928.40 per year. But increasing that by 3.9% means a pay rise of £1,011.21.
And someone aged 18 to 20 is entitled to the minimum wage of £10.85 per hour, or £22,134 each year if they work full-time. They will get a pay rise of £863.23.
About two million workers are currently paid either the Living Wage or Minimum Wage, and they are set to benefit from the change.
The Chancellor has ended the policy of his predecessor, Rachel Reeves, who pushed up the minimum wage for young workers faster than the living wage for people aged 21 and over. She wanted to give younger workers a pay rise, but business leaders warned that she was making it hard to employ young staff. Mr Healey’s policy is a major U-turn.
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.
“For pensioners, I am delivering the new pension tax allowance – so that pensioners with income up to the value of the full new state pension will not pay income tax in this Parliament.
“For ex-mineworkers, I’m guaranteeing that every penny of the pension fund surplus now goes to miners. I know the job’s not finished and I will go on to ensure the full transfer of the guarantor’s fund.
“For carers, I am getting rid of the cliff edge on earnings, so that people don’t lose their entire carer’s allowance when they earn a penny over the threshold.
“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%.”