A pay rise for 2.7million people has been announced by Rachel Reeves. On the eve of her make-or-break Budget, the Chancellor said the Government would increase both the minimum wage and the National Living Wage.
From April 1, the living wage will rise by 4.1% to £12.71 per hour for eligible workers aged 21 and over. This will increase the gross annual earnings of a full-time worker on the living wage by £900, benefiting about 2.4million low-paid workers. The minimum wage rate for 18 to 20-year-olds will also increase by 8.5%, to £10.85 per hour. This will mean an annual earnings increase of £1,500 for a full-time worker.
In the long run, the Government wants to end the 18-20 band entirely so that everyone aged 18 or over is eligible for the same living wage.
Ms Reeves said: “I know that the cost of living is still the number one issue for working people and that the economy isn’t working well enough for those on the lowest incomes. Too many people are still struggling to make ends meet. And that has to change.
“That’s why today I’m announcing that we will raise the National Living Wage and also the National Minimum Wage, so that those on low incomes are properly rewarded for their hard work.
“These changes are going to benefit many young people across our country, getting their first job.
“These changes mean that from April, the National Minimum Wage and the National Living Wage will boost the pay packets of around 2.7million workers.”
The Chancellor set out what she said are government measures to boost the economy, although opposition parties have criticised many of her decisions.
Ms Reeves said: “We also need to support businesses while protecting jobs and the economy.
“And that’s why we’ve secured trade deals with the US, with the EU, and with India.
“It’s why we’re committed to economic stability.
“In this week’s Budget, I’m going to deliver our mandate for change, and I’m determined to cut the cost of living for everyone.”
Ms Reeves is expected to announce measures to fill an estimated £20billion black hole in the public finances when she sets out her Budget.
The Government says priorities include cutting NHS waiting times and helping with the cost of living.
