Healey ‘to announce UK minimum wage will rise by nearly 4%’ in new boost for workers

Chancellor John Healey is expected to unveil plans on Wednesday to raise the minimum wage by nearly 4 per cent, according to reports.

The Times, citing unnamed sources, reported that the UK’s National Living Wage for workers aged 21 and over is set to rise by 3.9 per cent, moving from £12.71 to around £13.20 ($17.63) per hour.

Meanwhile, the National Minimum Wage for those aged 18, 19 and 20 will increase broadly in line with older workers, rising from £10.85 to approximately £11.27 an hour.

The finance ministry declined to offer any comment regarding the report.

If confirmed in Wednesday’s budget statement, these pay rises would take effect in 2027, bringing an end to the recent trend of younger staff receiving larger percentage increases than older employees.

Britain's minimum wage is one of the highest among advanced economies as a share of median earnings, following efforts by successive governments to lift it to two-thirds of median hourly pay.

Some analysts and employers have previously pointed to the rate payable to younger workers as a cause of increasing youth unemployment.

In April, the Low Pay Commission, which advises the government on minimum wage rises, said the National Living Wage would probably need to increase by around 3.7% in 2027 to £13.18 an hour to keep up with how it expected average pay to rise.

In March, the government ⁠tweaked the commission's remit to give it more scope to take labour ‌market conditions into ​account when setting the minimum wage ‌for 18- to 20-year-olds.

Earlier on Monday, prime minister Andy Burnham said the Budget will set out a path for defence spending to hit 3 per cent of national income by 2030.

He added that national security was “at the top of the priority list” ahead of the autumn statement.

Opposition critics and military figures have urged the Government to commit to a path for defence spending to reach 3% of gross domestic product (GDP) by the end of the decade, along with a Nato pledge to hit 3.5% by 2035.

The Chancellor, who resigned as defence secretary over a dispute about the pace and extent of military funding earlier this year, has previously said the timetable will be detailed at next year’s spending review rather than the Budget.