The UK government is raising the minimum wage but slowing pay increases for 18-to-20 year-olds, stepping back from Labour's earlier promise to eliminate age-based wage discrimination.
According to the BBC, the National Minimum Wage for 18-to-20 year-olds is set to rise 3.9% from £10.85 an hour to around £11.27. The Times reported this figure. This marks a smaller increase than the 26% rise the government implemented since returning to power in 2024. The National Living Wage for workers aged 21 and over will also rise 3.9%, reaching £13.20 from the current £12.71 an hour.
Business Secretary Jonathan Reynolds told the BBC the government was balancing "good wages" with labour market pressures. "The manifesto pledge on equalisation still applies but we were always clear it could happen over time," he said. Labour's manifesto promised to remove discriminatory age bands and give all adults the same minimum wage.
Unison general secretary Andrea Egan called the decision "deeply unfair." She highlighted that 20-year-old care workers, teaching assistants and security guards perform identical work to older colleagues but face lower pay, while their living costs remain unchanged.
Chancellor John Healey also announced several cost-of-living measures. The government is removing import tariffs from around 100 food items, which the Treasury estimates could save households up to £21 annually or 40p weekly when combined with tariff suspensions introduced in June. Reynolds told the BBC the combined savings from summer tariff changes on pasta, fruit juice and tuna would amount to around £500 million per year.
Additional announcements include making permanent a 55p per mile tax-free mileage allowance for workers driving up to 10,000 miles for employment. Self-employed fathers will receive two weeks of paternity pay, previously unavailable to them. The government will also allow carers to earn more before losing allowance payments, though the taper mechanism replacing the cliff-edge penalty does not take effect until 2030. Fuel duty remains frozen, with the existing 5p discount continuing.
The Conservatives criticized the package as inadequate. Shadow chancellor Andrew Griffith said: "Shoppers face rising costs at the till and families are struggling to make ends meet, but Burnham's plan is cheaper gherkins. This is an insult to families hammered by Labour's tax rises."