Budget 2024: Minimum wage employees to get big pay enhance – what it means for you

Rachel Reeves has announced a pay rise for millions of low-paid workers with a boost to the national minimum wage.

On the eve of Labour’s first Budget in almost 15 years, the Chancellor said there will be a hike of 6.7% from April 2025. It will mean that the national minimum wage for over 21s will increase from £11.44 to £12.21 an hour – a boost of £1,400 a year for a full-time worker. Deputy PM Angela Rayner declared: “A proper day’s work deserves a proper day’s pay.”

For those under 21, the minimum wage will increase from £8.60 to £10.00 – a hike of £1.40 an hour and the largest increase on record. The Treasury said the changes will impact 3.5million workers in total and marks the “first step” in creating a single adult wage rate. Labour’s election-winning manifesto promised to ensure the minimum wage is a “genuine living wage” and also vowed to remove the “discriminatory age band”.

Ms Reeves said: “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.” Deputy PM Angela Rayner added: “A proper day’s work deserves a proper day’s pay. Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”

General Secretary of the Trades Union Congress (TUC) Paul Nowak responded: “The government is delivering on its promise to make work pay. This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high.”

Baroness Philippa Stroud, chair of the Low Pay Commission, which makes to ministers on the minimum wage, said: “The Government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that has created alongside other pressures to their cost base.

“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”

The statutory minimum wage set by the Government is separate to the voluntary Real Living Wage, which is higher and is based on how much it actually costs to live in the UK, including food and household bills. The Real Living Wage pays £12.60 an hour outside London and £13.85 an hour inside London. It is paid by more than 15,000 employers including Aviva, Everton FC, Ikea, Burberry and Lush.

How to check if you’ve been underpaid

If you think your employer has been underpaying you, the first thing you should do is go through your payslips and check your wages against the minimum rates. If it looks like you haven’t been paid properly, speak to your employer first and ask them to investigate. If this doesn’t work, and you don’t get the wages owed to you, you can complain to HMRC via GOV.UK.

If your employer still does not pay you the money you’re owed, they can be fined by HMRC. HMRC can also take them to court on behalf of the worker if the employer still refuses to pay. You can also complain to the Advisory, Conciliation and Arbitration Service (ACAS) pay and work rights helpline on 0300 123 1100 if you’ve been underpaid.