In a significant move for low-paid workers, Rachel Reeves is anticipated to declare a 6% increase in the national minimum wage for 2025. This adjustment, which surpasses last month’s forecasts, aims to benefit over 1 million individuals currently earning the national minimum wage.
Details of the Minimum Wage 2024 and 2025 Changes
The planned rise will elevate the minimum wage UK to approximately £12.12 for those aged 21 and older, in line with the government’s commitment to “raise the floor” on wages. This increase is crucial as it ensures that the national minimum wage 2024 does not fall below two-thirds of median earnings, a target established nearly a decade ago.
Economists highlight that this adjustment in the minimum wage is necessary, particularly as the cost of living continues to rise. Nye Cominetti from the Resolution Foundation noted that millions of low earners could see a positive impact from this budget announcement.
Implications for Employers and Workers
While this expected increase in the minimum wage 2025 is seen as good news for workers, businesses are raising concerns about the accompanying rise in national insurance contributions. This combination could significantly increase wage costs for many employers.
What is the minimum wage? The national minimum wage is the legally mandated lowest pay rate for workers in the UK, designed to ensure fair compensation for labor. With the upcoming changes, the focus is on improving the living standards of those most affected by low pay.
As the announcement approaches, many are hopeful that the increase will not only benefit workers but also stimulate local economies since low-paid workers tend to spend a larger proportion of their income within their communities.