UK Minimum Wage Is Rising, but Millions of Young Workers Could Be Left Behind

Britain is preparing another minimum wage increase, but workers aged 18 to 20 will receive a smaller percentage raise than in recent years, leaving the government’s promise of equal adult pay rates unfulfilled.

Young Workers Face a Smaller Increase Than Expected

According to the BBC, the government is expected to announce new minimum wage rates in the Budget, with younger employees receiving a percentage increase similar to that offered to workers aged 21 and over.

The Times reported that the minimum wage for 18-to-20-year-olds could rise by 3.9%, from £10.85 to approximately £11.27 an hour. The National Living Wage, currently £12.71 for workers aged 21 and over, is also expected to increase by 3.9%, reaching around £13.20.

The figures would leave younger adults earning nearly £2 less per hour than older colleagues.

Since taking office in 2024, Labour has increased the minimum wage for younger workers by 26%, pursuing its manifesto commitment to eliminate what it described as “discriminatory age bands.”

That commitment remains in place, but ministers are now emphasizing a gradual approach.

Business Secretary Jonathan Reynolds told the BBC that equalizing the rates could happen over time.

“Of course, you want not just good wages but good work,” he added. “It is a balance of making sure the pressures on the labour market are taken into account.”

Unions Challenge the Persistent Age-Based Pay Gap

The proposed increase has drawn criticism from unions, which argue that employees performing identical duties should receive identical minimum pay regardless of age.

Andrea Egan, general secretary of Unison, called the continued difference deeply unfair.

“Twenty year-old care workers, teaching assistants and security guards do the same work as their older colleagues,” she said. “They don’t pay less in the supermarket or at the petrol pump. They must be paid equally.”

The disagreement highlights the tension between Labour’s wage-equality pledge and government concerns about conditions in the labor market.

Government Unveils Additional Cost-of-Living Measures

Alongside the anticipated wage changes, ministers have announced measures intended to ease household expenses.

The government plans to remove import tariffs on 100 products, including baked beans, garlic, plant-based drinks, confectionery and certain heating fuels.

Officials estimate that the reductions, combined with earlier tariff suspensions, could save households up to £21 annually, equivalent to roughly 40 pence per week.

The government also plans to make the 55p-per-mile tax-free mileage rate permanent for the first 10,000 miles of work-related driving. The rate above that threshold would increase from 25p to 35p.

Another reform would replace the abrupt loss of carer’s allowance when recipients exceed an earnings limit with a gradual reduction. That change is not scheduled to begin until 2030.

Self-employed fathers would also become eligible for two weeks of paternity payments.

Ministers Defend Modest Savings as Critics Question Their Impact

Speaking to the BBC’s Newscast, Healey acknowledged that the measures would provide limited relief.

“None of this is going to change the world. But if it helps around the margins and its action the government can take, then I want try and fix it.”

The government is also expected to maintain the existing 5p fuel duty discount, first introduced in 2022.

Critics argue that smaller savings offer little protection against higher household expenses.

The Food and Drink Federation warned that expensive energy continues to make British food production less competitive than production in neighboring countries.

Meanwhile, Conservative representatives criticized the government’s approach, arguing that rising taxes, borrowing costs and inflation have already outweighed the proposed savings.

The Treasury said it would publish the full list of products benefiting from the latest tariff removals on Wednesday.