Budget 2024: Minimum wage explained as pay boost confirmed for millions of workers

Rachel Reeves has announced minimum wage will rise by 6.7% from April 2025 ahead of her Budget this afternoon - Labour says this will mean an extra £1,400 a year for a full-time worker

More than a million low-paid workers are set for a bumper pay rise after new minimum wage rates were confirmed ahead of the Autumn Budget.

Rachel Reeves has announced minimum wage will rise by 6.7% from April 2025. This is higher than both the current rate of inflation, which sits at 1.7%. Labour says this will mean an extra £1,400 a year for a full-time worker earning the main minimum wage rate. However, the increase is still below the UK living wage calculated by the Living Wage Foundation.

The minimum wage is how much a business has to pay their employees by law, depending on your age - however, many companies actually pay their workers more than the minimum rates. Here is everything you need to know.

How much is minimum wage rising by?

The minimum wage will increase to the following rates, depending on your age:

• 21 and over: £11.44 an hour to £12.21 an hour
• 18 to 20: £8.60 an hour to £10 an hour
• Under 18: £6.40 an hour to £7.55 an hour
• Apprentice: £6.40 an hour to £7.55 an hour

The minimum wage for workers above the age of 21 is known as the National Living Wage, while anyone under the age of 21 is paid the National Minimum Wage. Earlier this year, Labour announced plans to introduce a “genuine” living wage and remove age bands so everyone is paid the same rate, regardless of age. The aim would be to move toward a single adult rate.

How to check if you’ve been underpaid

If you suspect you’ve been underpaid, you should go through your payslips and check them against the minimum rates. If it looks like you haven't been paid at least the minimum wage, you should first talk to your employer to give them the chance to fix the issue. If this doesn't work, you can complain to HMRC via GOV.UK.

HMRC will investigate and if your employer does not pay you the money you're owed, they can be fined by HMRC for not paying the minimum wage. HMRC can also take them to court on behalf of the worker if the employer still refuses to pay. You can also complain to the Advisory, Conciliation and Arbitration Service (ACAS) pay and work rights helpline on 0300 123 1100 if you've been underpaid.

What is the Real Living Wage?

The Real Living Wage is a voluntary pay for workers over the age of 18, whose employer is signed up to the Living Wage Foundation. The idea is that the Real Living Wage is based on what a full-time worker and their family needs to make ends meet, including costs of food, clothing and household bills.

It is higher than the statutory minimum wage and applies to all workers over the age of 18 working for a Real Living Wage employer. More than 15,000 employers pay the Real Living Wage, including Aviva, Everton FC, Ikea, Burberry and Lush. Here is how much the Real Living Wage pays:

• £12.60 an hour outside London
• £13.85 an hour inside London