Minimum wage set to rise but 18-20 year-olds will not get bigger increase
UK Minimum Wage Set to Rise, but 18–20-Year-Olds May Get Smaller Increase
The UK minimum wage is expected to increase in 2027, but workers aged 18 to 20 may receive smaller pay rises than they have enjoyed in recent years.
Reports suggest that the government is considering an increase of around 3.9% for younger workers. This would bring their hourly minimum wage from £10.85 to approximately £11.27.
Meanwhile, workers aged 21 and above are expected to see their National Living Wage rise from £12.71 to around £13.20 per hour.
The proposed changes are expected to be announced in the government’s Budget. However, the figures remain provisional until the government officially confirms the new rates.
UK Minimum Wage Increase 2027: What Workers Should Know
The expected increase would provide additional earnings for millions of low-paid workers across the United Kingdom.
However, the proposed adjustment represents a change in the government’s recent approach to wages for younger employees.
Over the past two years, workers aged 18 to 20 have received larger increases than older employees. These increases were intended to bring their minimum pay closer to the main adult rate.
The latest proposal suggests that younger workers may now receive an increase at roughly the same percentage rate as older employees.
If confirmed, the change would slow the progress towards establishing a single minimum wage rate for all adult workers.
How Much Could the Minimum Wage Increase?
According to reports, the National Living Wage for workers aged 21 and above could increase by 3.9%, from £12.71 to £13.20 per hour.
For workers aged 18 to 20, the National Minimum Wage could rise by the same percentage, from £10.85 to approximately £11.27 per hour.
These figures would mean that younger workers continue to earn a lower minimum hourly rate than employees aged 21 and above.
The proposed increase would nevertheless provide additional income for eligible younger employees.
For example, a worker earning the proposed rate of £11.27 per hour would receive £0.42 more for every hour worked than under the current £10.85 rate.
For someone working 35 hours each week, that would amount to approximately £14.70 in additional gross weekly earnings.
Actual earnings would depend on working hours, deductions and the final rates approved by the government.
Government Balances Higher Wages With Employment Concerns
The government has previously pledged to move towards equal minimum pay for adult workers.
However, officials have also acknowledged concerns about employment opportunities for younger people.
Business Secretary Jonathan Reynolds said the commitment to equalising wage rates remained in place, but explained that the process could happen over time.
The government must consider workers’ earnings alongside the costs employers face when hiring staff.
Some employers and analysts have warned that higher wage costs could make businesses more cautious about recruiting inexperienced workers.
This concern is particularly relevant to sectors such as retail and hospitality, where many young people seek their first jobs.
However, the relationship between minimum wage increases and youth unemployment remains debated. Other factors, including economic conditions, business costs and the number of available vacancies, can also affect recruitment.
Trade Unions Call for Equal Pay
The prospect of younger workers continuing to receive a lower minimum wage has also attracted criticism from trade union representatives.
Andrea Egan, general secretary of Unison, argued that younger employees should receive equal pay when performing the same work as their older colleagues.
Her position reflects concerns that age-based wage differences can leave younger workers struggling with the same living costs faced by other adults.
Housing, transport, food and household bills can consume a significant share of workers’ earnings, regardless of age.
Supporters of equal minimum pay argue that removing age-based differences would help younger employees manage these expenses.
However, the government must also consider the possible effects of wage changes on businesses and employment opportunities.
What Happens Next?
The proposed minimum wage increase is expected to form part of the government’s wider economic plans for 2027.
Workers and employers will need to wait for the official announcement before treating the reported figures as confirmed rates.
If approved, the new minimum wages are expected to take effect in 2027.
The decision will affect businesses that employ workers on minimum pay, particularly those with large numbers of younger employees.
For young people entering the workforce, the size of the increase will matter. So will the availability of jobs, training opportunities and routes into better-paid employment.
Ultimately, the proposed changes highlight the challenge of improving workers’ earnings while protecting employment opportunities.
The government’s final decision will determine how quickly younger workers move towards the main adult minimum wage rate.
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