Chancellor Rachel Reeves will announce in the Budget on 26 November an increase to the national living wage, according to press reports.
According to The Times, “the chancellor is likely to confirm a rise in the national living wage of about 4%, from £12.21 to at least £12.70, in an effort to deliver on her pledge to improve living standards”.
The newspaper said she will also commit to extending it to 18-21-year-olds. The rate currently applies to those 21 and over.
Business groups have expressed concern over the plans, warning that the increase will add to employers’ already high costs.
Kate Nicholls, head of the trade body UKHospitality, said: “Businesses are already struggling to absorb all the costs from last year, two successive years of significant minimum wage rises and crucially NICs [national insurance contributions]. We have seen 100,000 jobs lost as a direct result of that.
“If you want fair pay, you have got to have sustainable businesses. If you are pricing those jobs out of existence, it doesn’t matter how high the minimum wage goes. Businesses simply can’t digest and absorb these costs. It is having real-world consequences on jobs, livelihoods and business viability. It’s the cumulative impact.”