Rachel Reeves confirms 6.7% increase in National Living Wage in move to 'protect working people'
30 October 2024, 13:39 | Updated: 30 October 2024, 14:04
The National Living Wage for people aged 21 or older will rise by 6.7% from £11.44 an hour to £12.21, Rachel Reeves has confirmed in the Budget.
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The Chancellor also confirmed the National Minimum Wage for people aged between 18 and 20-years old will rise by 16% from £8.60 to £10, as recommended by the Low Pay Commission.
Reeves had announced the increases on Tuesday as she revealed they will take effect from April 2025.
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The Chancellor had exceeded the recommendations of the Low Pay Commission earlier this year in terms of the National Living Wage to increase the figure by 5.8% to £12.10.
The Low Pay Commission is an independent body that advises the government, although its remit is set by the government of the day.
The government said a full-time worker aged 21 and older will earn an extra £1,400 a year following the changes.
Apprentices will receive the largest pay bump, with Reeves confirming their hourly pay will increase from £6.40 to £7.55 - an 18% increase.
The Chancellor said these increases are "a Labour policy to protect working people, being delivered by a Labour government once again".
The increase in Minimum wage for workers aged between 18 and 20 is part of government efforts to create in the future a single minimum rate for all adults instead of the current tiered system.
Their pay bump from £8.60 per hour to a flat £10 means a full-time worker will get an extra £2,500 in a year, the government says.
Ms Reeves said on Tuesday: "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."
Deputy Prime Minister Angela Rayner had said: "A proper day's work deserves a proper day's pay."Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18-year-olds on record."
The increase to the national living wage is lower than over the past two years, with those aged 21+ seeing their wages go up by more than 9% each year.
Business Secretary Jonathan Reynolds said: "Good work and fair wages are in the interest of British business as much as British workers.
"This government is changing people's lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth."
