The UK government has announced an increase in the minimum wage that will benefit millions of workers starting from April 1. The hourly pay for individuals over 21 will increase by 50p, bringing it to £12.71. Workers aged 18 to 20 will see an 85p rise to £10.85, while those under 18 and apprentices will receive a 45p increase to £8 an hour. Chancellor Rachel Reeves indicated that approximately 2.7 million people would benefit from these changes.
This increase follows significant rises in previous years, with rates having climbed by 6.7% and 16.3% for different age groups last year. However, businesses have expressed concerns that further increases may lead to hiring freezes, as the higher wages could increase operating costs. The Treasury stated that the new rates consider the needs of workers while balancing affordability for businesses and employment opportunities.
Specifically, the minimum wage for those over 21 represents a 4.1% increase, translating to an annual income rise of £900 for full-time workers. For 18 to 20-year-olds, the minimum wage will rise by 8.5%. The government has indicated a desire to phase out separate rates for younger workers in favor of a unified adult rate. If implemented, the increase for 16 and 17-year-olds and apprentices will be 6%.
The Real Living Wage, an unofficial rate overseen by the Living Wage Foundation, currently stands at £13.45 in the UK, and the foundation’s director noted that the government’s new rates do not fully address living costs. The Resolution Foundation expressed that the increase for 18 to 20-year-olds might hinder job opportunities.
Voicing a range of perspectives, the Trades Union Congress supported the pay rise, highlighting the financial challenges faced by young workers. In contrast, representatives from the hospitality and business sectors warned that increased wage costs without alleviation of tax burdens might lead to higher prices for consumers and ultimately impact employment opportunities for young people.
Source: https://www.bbc.com/news/articles/cn41v89xq4go?at_medium=RSS&at_campaign=rss