The UK government will raise the minimum wage for workers aged 18 to 20, but the increase will be smaller than in previous years and will not close the gap with older workers, according to the BBC.
The National Minimum Wage for 18-to-20 year-olds is expected to rise by 3.9% from £10.85 an hour to around £11.27, The Times reported. The increase for older workers will be the same 3.9%, raising the National Living Wage from £12.71 to £13.20 an hour.
The move breaks a Labour manifesto pledge to remove age-based wage discrimination. Since taking power in 2024, the government increased the younger workers' rate by 26%, but has now slowed the pace of equalisation. Business Secretary Jonathan Reynolds told the BBC the manifesto commitment "still applies but we were always clear it could happen over time," citing the need to balance wage increases with pressure on the labour market.
Andrea Egan, general secretary of the union Unison, said the two-tier system was unfair. "Twenty year-old care workers, teaching assistants and security guards do the same work as their older colleagues," she said. "They don't pay less in the supermarket or at the petrol pump. They must be paid equally."
The wage announcement comes as part of a broader set of cost-of-living measures announced by Chancellor John Healey. The government will remove import tariffs from 100 food items, a move expected to save households up to £21 per year when combined with tariff suspensions introduced in June. The government said the measure would save around £500 million annually.
Other measures include raising the tax-free mileage allowance for work travel to 55p per mile for the first 10,000 miles, increasing paid paternity leave for self-employed fathers from zero to two weeks, and replacing a cliff-edge earnings limit for carers with a tapered system from 2030 onwards. The government will also freeze fuel duty again and extend a 5p duty discount first introduced in 2022.
Food and Drink Federation director Balwinder Dhoot questioned the focus on import tariffs rather than reducing business costs, citing high energy expenses in the UK. The Conservative Party attacked the measures as insufficient, with Shadow Chancellor Andrew Griffith saying the government's "everyday fixes" had been overwhelmed by higher borrowing costs and taxes.