Union leaders have welcomed plans to boost the National Living Wage as making a “real difference to the lowest-paid” ahead of the Budget.
Chancellor Rachel Reeves announced this evening that more than three million workers will receive a pay rise next year following a 6.7% hike in the National Living Wage.
The wage is set to increase from £11.44 to £12.21 an hour from April 2025 – which is worth £1,400 a year for an eligible full-time worker.
TUC General Secretary Paul Nowak praised the move as evidence that Labour is “delivering on its promise to make work pay.”
He said: “This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high.
The 18-20 National Minimum Wage will also see a record rise of an extra £1.40 per hour as part of a move towards a single adult rate.
Reeves said: “This government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”
It comes as Whitehall gears up for Labour’s first Budget since returning to power tomorrow, which is expected to include other measures from changes to fiscal rules to tax rises.
Chair of the Low Pay Commission Baroness Philippa Stroud said: “These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”
Unison assistant general secretary Jon Richards said: “Many of the employees delivering essential services and caring for those unable to look after themselves will benefit from the rise. They’ll be able to spend more within their communities, helping local economies grow.
But he added: “But as it stands, the new legal minimum is more than the current lowest hourly rate in the NHS, universities and some other public services. This will give employers multiple headaches.
“To avoid this in the NHS, the government should ditch the outdated pay review body process and start talks with unions now. This will ensure wages remain competitive for all employees, so staff don’t leave the NHS.”
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