Pay rise for millions Rachel Reeves announces in autumn budget as minimum wage to go up by £1,400 a year
MILLIONS of workers will get a pay rise of £1,400 a year from 2025, Chancellor Rachel Reeves has confirmed.
The Government is hiking the National Minimum Wage by 6.7% from April 1.
In today’s Budget, the Chancellor confirmed the hike for three million people.
She said: “It was the Labour government that introduced the National Minimum wage in 1999.
“It had a transformative impact on the lives of working people.
“As promised in our manifesto, we asked the Low Pay Commission to take account of the cost of living for the first time.
“I can confirm that we will accept the Low Pay Commission recommendation to increase the National Living Wage by 6.7% to £12.21 an hour.”
Meanwhile, the National Minimum Wage for 18 to 20-year-olds will be hiked from £8.60 to £10 an hour – a 16.3% rise and biggest increase in the rate on record, the Chancellor confirmed.
It will see eligible youngsters in full-time employment earn an additional £2,500 a year.
Both new rates are less than the £12.60-an-hour rate calculated by the Living Wage Foundation and paid by 15,000 employers.
The Real Living Wage is paid voluntarily to staff by bosses and is not a legal requirement unlike the Minimum Wage.
In Budget documents, the Government also said it plans to create a single adult wage rate for workers across the UK “over time”.
But while the increase in National Minimum Wage announced today is good news for workers, it will pile pressure on businesses.
Robert Salter, director at Blick Rothenberg, said: “The increase in the National Minimum Wage from April 2025 to £12.21 means that small businesses have seen a 37% increase in the National Minimum Wage since the 2020/21 year.
“This is a significant real increase on the costs faced by businesses and could easily result in increased unemployment over time.”
The “trick and treat” Halloween package from Rachel Reeves included:
- A freeze to fuel duty for a 15th consecutive year in a win for The Sun’s Keep It Down campaign
- A penny off a pint by cutting draught beer duty, but raising booze taxes on other drinks
- A gloomy forecast of sluggish growth in a blow to Labour’s flagship mission
- A stamp duty rise for second-home buyers of two percentage points
- A pay rise for millions as the minimum wage was increased by £1,400 a year
- A hike to a packet of cigarettes as smoking duties were raised
- A new tax on vapes ahead of the looming ban on disposable e-cigs
- Higher taxes on air passenger duty for private jets that hits the wealthy
- A benefits crackdown with Ms Reeves telling jobless Brits to “get back to work”
- An increase to the state pension of £473 next year through the triple lock
- An inheritance tax raid through freezing the rates people pay
- An increase to the Carer’s Allowance to give cash to 60,000 more carers
MINIMUM WAGE SHAKE-UP
There are currently two different minimum rates all workers are supposed to get across the UK – National Minimum Wage and the National Living Wage.
What's the Real Living Wage?
Unlike the National Minimum Wage and National Living Wage, the rate is not a legal requirement and is voluntary.
Over 15,000 UK businesses voluntarily pay it because they believe their staff deserve a wage that meets everyday needs.
Those working for employers subscribed to the scheme can expect to earn £12 an hour or £13.15 an hour is they’re based in London
The National Minimum Wage (NMW) is the minimum pay per hour for workers who have left school.
As it stands, those who have left school and are aged under 18 must get a minimum of £6.40 an hour.
Meanwhile, the National Living Wage is the minimum wage for those over 21 and is slightly higher.
It was previously only available to those over 23, but this was adjusted to 21 and over in November 2023.
It’s currently worth £11.44 an hour but this will change from April 1, 2025.
Both the National Living and Minimum Wage rise each year so workers’ pay keeps up with the cost of living.
Who gets the National Minimum Wage?
You qualify for the National Minimum Wage if you are of school leaving age, which is usually above 16.
You are eligible to receive the pay rate if you work full-time or part-time.
WATCH RACHEL REEVES ON NEVER MIND THE BALLOTS
By Ryan Sabey, Deputy Political Editor
RACHEL Reeves will be grilled in a special Budget edition of The Sun’s Never Mind The Ballots show today.
Our Political Editor Harry Cole will put the Chancellor on the spot shortly after she’s finished delivering her crucial address in the House of Commons.
It will be available to watch on thesun.co.uk, YouTube and Sun social channels at 5.30pm.
Topics will include her decision on whether to spare motorists a fuel duty rise, and the expected eye-watering tax rises she will impose.
Since its launch earlier this year, NMTB has cemented its place at the heart of British politics.
During the General Election campaign The Sun was the only print publisher to host back-to-back grillings of Rishi Sunak and Sir Keir Starmer.
Footage from The Election Showdown has been viewed over 15 million times.
NMTB has also featured interviews with ex-PMs Boris Johnson and Liz Truss, as well as senior politicians Nigel Farage, James Cleverly, Wes Streeting, Steve Reed and Bridget Phillipson
Apprentices also qualify for a National Minimum Wage, as well as trainees and staff still in their probationary period.
The rates also apply to disabled workers.
Those who are self-employed, voluntary workers, company directors, and family members who live in the home of the employer and do household chores do not qualify for the minimum wage.
Au pairs, members of the armed forces, and people on a government employment programme are also not entitled to the payment.
BRITAIN’S MOST MEMORABLE BUDGETS
Today is the first Labour budget for 14 years – and the first ever to be delivered by a female Chancellor.
Brits are bracing for a raft of tax hikes as Rachel Reeves tries to plug the “£22billion black hole” she says she’s found in government accounts.
Here are five other budgets which have caused a stir over the years.
1979 – Geoffrey Howe, Conservative
Margaret Thatcher’s Chancellor Geoffrey Howe slashed both the top rate of income tax and the standard rate.
He also doubled VAT – shifting the tax burden from income to consumption in a huge change for Brits.
Howe also eased controls on foreign exchange in a bid to control inflation.
The budget signalled a massive break from the last Labour government and set the pattern for decades to come.
1988 – Nigel Lawson, Conservative
Nigel Lawson (dad to domestic goddess Nigella) massively slashed income tax again.
The deputy Commons speaker twice cleared the chamber amid noisy protests from Labour MPs slamming the tax cuts.
Lawson also set off a property bonanza by announcing an end to double mortgage tax relief for couples buying homes.
1993 – Norman Lamont, Conservative
In March 1993 the economy was still reeling from Black Wednesday, when the pound crashed out of the European exchange rate mechanism.
Lamont announced tax rises including VAT on domestic gas and electricity.
Later that year Lamont’s successor Ken Clarke froze personal tax allowance and brought in stealth taxes on insurance and plane passengers.
The Lamont and Clarke budgets marked the end of the Tories’s scything tax cuts – and set the stage for Labour’s return to office in 1997.
2002 – Gordon Brown, Labour
Brown raised national insurance by a penny on the pound to fund higher spending on the NHS.
The future PM had fretted over a possible backlash from voters who had re-elected Labour in 2001.
But he managed to pull off the largest rise in health spending in the history of the NHS.
2009 – Alistair Darling, Labour
Labour’s last budget before today came amid the credit crunch and soaring unemployment.
Darling ramped up taxes and borrowing in a bid to fill up draining Treasury coffers.
Tory leader David Cameron blasted Labour’s ‘utter mess’ – and was in power a year later.
2022 – Kwasi Kwarteng, Conservative
Kwarteng unveiled his economic package less than a month after becoming Liz Truss’s Chancellor.
Technically, it was a fiscal statement rather than a budget – but it turned out to be just as seismic.
Rising Tory star Kwarteng announced £45billion in tax cuts including a drop in all rates of income tax.
Markets took frights and the pound went into freefall before the Bank of England waded in to stop a run on UK pension funds.
Mortgage rates soared and Kwarteng was out of the job just three weeks later.
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