What is the UK minimum wage and what will it be after government reforms?
Rachel Reeves announces in Autumn Budget that baseline work figure will increase
Rachel Reeves has announced that workers are set to benefit from increased minimum wages, with the base rate set to rise from next year.
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In announcing the change as part of this week’s Autumn Budget, the government said the change will help workers to earn a worthy salary.
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Ms Reeves, the chancellor, said: “Too many people are still struggling to make ends meet, and that has to change.
“That’s why I’m announcing that we will raise the National Living Wage and also the National Minimum Wage, so that those on low incomes are properly rewarded for their hard work.”
Here are the key details.
What is the minimum wage and what is the National Living Wage?
The national minimum wage is the lowest amount an employer can give to a worker who has beyond school age, and contracts for payments below the minimum wage are not legal.
There are some exceptions to the rule, including those in the armed services, volunteers, prisoners, those living in a religious community, and there are also separate rules for apprentices.
The National Living Wage is higher and is enforced for workers who are 21 years-old or older.
How much is the minimum wage and the National Living Wage?
The rate is currently £12.21 per hour for those aged 21 and over, £10 for those aged 18-20, and £7.55 for under-18s and apprentices.
How much will the UK minimum wage and National Living Wage be and when is it going up?
From April 1, 2026, the National Living Wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over.
The Government said this will increase gross annual earnings of a full-time worker on the rate by £900, benefiting around 2.4 million low-paid workers.
The National Minimum Wage rate for 18 to 20-year-olds will increase by 8.5% to £10.85 an hour, narrowing the gap with the National Living Wage.
This will mean an annual earnings increase of £1,500 for a full-time worker, which the Government said marks further progress towards its goal of phasing out 18 to 20 wage bands and establishing a single adult rate.
The National Minimum Wage for 16 to 17-year-olds and those on apprenticeships will increase by 6% to £8 an hour.