On the eve of the 2024 Autumn Budget, Chancellor Rachel Reeves has confirmed the National Living Wage, basically the minimum wage for people aged 21 and above, is to increase to £12.21, a rise of £0.77, starting April 2025.
A change made last year made the living wage applicable to everyone aged 21 and over, making the current living wage £11.44 an hour:
The near 7 percent rise in the living wage, is joined by higher rises in the minimum rates for other ages and apprentices, as seen in the table below:
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
|---|---|---|---|---|
| Rates until April 2025 | £11.44 | £8.60 | £6.40 | £6.40 |
| Rates From April 2025 | £12.21 | £10.00 | £7.55 | £7.55 |
| Pound (£) Increase | £0.77 | £1.40 | £1.15 | £1.15 |
| Percentage Increase | 6.7% | 16.3% | 18% | 18% |
The rise for people aged between 18 and 20 is £1.40 - this is the highest rise since records began and is effectively an over 16 percent rise. It's possible the government will be attempting to align the living wage for all adults from age 18. Many 18-20 year old will see a salary rise of £2,500 from April next year.
Rachel Reeves' move to announce just before presenting her Budget follows the same timeline as Jeremy Hunt, who last year also announced the wage increases before his Budget.
The new Living Wage is still short of the Living Wage Foundation's recommendation of £12.60 an hour. However, the increased pressure on employers from the mandatory wage rise and predictions of employers' NIC increases in tomorrow's Budget will lead to more discussion on the economic efficacy of the new Labour government's policy.