- The cost of living is the number one issue for working people
and the government will always take action to ensure people have
more money coming in.
- That is why the government has accepted the recommendations
of the LPC to increase the National Living Wage and National
Minimum Wage.
- The government has recently taken further action to ease the
cost of living having frozen rail fares, prescription fees and
uprated the Triple lock.
In a video message posted today,
the Chancellor of the Exchequer,
said:
I know that the cost of living is still the number one issue
for working people and that the economy isn't working well enough
for those on the lowest incomes.
Too many people are still struggling to make ends
meet.
And that has to change.
That's why today I'm announcing that we will raise the
National Living Wage and also the National Minimum Wage, so that
those on low incomes are properly rewarded for their hard
work.
These changes are going to benefit many young people across
our country, getting their first job and I'm pleased to be here
at Primark talking to workers about these
announcements.
These changes mean that from April, the National Minimum Wage
and the National Living Wage will boost the pay packets of around
2.7 million workers1.
For a full-time worker on the National Living Wage, that
means an increase in pay of £900 a year.
And for someone on the National Minimum Wage, working full
time, it will mean a £1500 increase.
We also need to support businesses while protecting jobs and
the economy.
And that's why we've secured trade deals with the US, with
the EU, and with India.
It's why we're committed to economic
stability.
To help interest rates fall further.
It is why we have capped corporation tax, and why we're
reforming business rates, particularly so that they help the high
street.
In this week's Budget, I'm going to deliver our mandate for
change, and I'm determined to cut the cost of living for
everyone.
Notes to editors
External Quotes:
Youth Employment UK: "We welcome this increase,
which is a vital and necessary step in the government's ongoing
journey to make work pay for everyone. The evidence from our 2025
Youth Voice Census clearly shows that the cost of living and low
pay remain major obstacles for young people entering the world of
work, and this rise will provide much needed financial relief.
However, we also recognise the significant cost pressures this
places on business, meaning the forthcoming Budget must provide
the support and stability employers need to invest in youth jobs
and training"
Note to editors:
- From 1 April 2026, the NLW will rise by 4.1% to £12.71 per
hour for eligible workers aged 21 and over. This will increase
the gross annual earnings of a full-time worker on the NLW by
£900, benefiting around 2.4m low-paid workers.
- The NMW rate for 18–20-year-olds will also increase by 8.5%
to £10.85 per hour, narrowing the gap with the NLW. This will
mean an annual earnings increase of £1,500 for a full-time
worker, and marks further progress towards the government's goal
of phasing out 18-20 wage bands and establishing a single adult
rate.
- The NMW for 16–17-year-olds and those on apprenticeships will
increase by 6% to £8 per hour.
- By seeking expert and independent advice, we are able to
ensure that the right balance is struck between the needs of
workers, the affordability for businesses and the opportunities
for employment.
- We are a pro-business government that has capped Corporation
Tax at 25%, the lowest rate in the G7, we're reforming business
rates, have secured trade deals with the US, EU and India, and
have seen interest rates cut five times since the election,
benefiting businesses in every part of Britain
- The Chancellor's Budget will deliver on the Government's
mandate for change and the priorities of the British people:
cutting waiting lists, cutting the national debt and cutting the
cost of living.
- These are early provisional figures based on methodology set
out in DBT's Impact Assessment for the 2025 rates (link) and updates this
methodology using inflation forecasts to estimate the
counterfactual. DBT will publish a full Impact Assessment in
early 2026.1
