National living wage to go up in April

Millions of working people are set to get a financial boost in April.

The government is legislating to increase the national living wage by 6.7% to £12.21 an hour.

This will be worth £1,400 a year for an eligible full-time worker.

Meanwhile, the national minimum wage for 18 to 20-year-olds is set to go up by £1.40 to £10 an hour. 

This record increase will boost the pay of full-time younger workers eligible for the rate by £2,500 a year.

Putting money ‘into the pockets of workers’

The upcoming increase in the national living wage is significant because it’s the first time it has taken inflation and the cost of living into account.

The government says these reforms will benefit more than 3m people working in shops, restaurants and other workplaces, and put £1.8bn into their pockets over the next six years.

Ministers believe this increased income will improve their spending power, and in turn drive economic growth.

Chancellor Rachel Reeves said: “This government promised a genuine living wage for working people that will support people with the cost of living, creating a workforce that is fit and ready to help us deliver [our] number one mission to grow the economy.  

“This pay boost for millions of workers is a significant step towards delivering on that promise.”

Employment rights minister Justin Madders added: “Economic growth only matters if working people are feeling the benefits.  

“This will be a welcome pay bump for millions of workers, who in turn will spend more in the real economy boosting our high streets.”

Shifting towards single adult wage rate

The increases in the national living wage and the national minimum wage also represent a step towards aligning them to create a single adult wage rate.

As Rachel Reeves confirmed in last autumn’s budget, a single adult rate will be phased in over time.

The government believes this will stop employers being able to justify paying younger workers less for doing the same job as their older colleagues.

Unions welcome wage increases

The changes have been welcomed by the Trades Union Congress (TUC), which said they’re “good for workers and good for local economies”.

“The increase in the national minimum wage will make a real difference to the lowest paid at a time when one in six are skipping meals to get by,” said TUC general secretary Paul Nowak.

“And moving to end the outdated and unfair youth rates will give young workers a boost up and down the country.”  

Mr Nowak added that following “the biggest squeeze in living standards in 200 years”, this financial boost for working people is “badly needed”.

I’m in work and struggling - what can I do?

If you’re in employment and still finding it hard to make ends meet, there are steps you can take.

Use our minimum wage calculator to find out if you're being paid the correct national minimum wage or national living wage. 

And if you think you’ve been underpaid, check out our handy guide outlining what you can do.

It’s also well worth making sure you’re on top of how much money is coming in and going out by using our budget planner.

Meanwhile, make sure you’re getting all the help you qualify for with our free benefits calculator.

Finally, if you’re finding it hard to manage your debts, then find out how we can help.