One million UK workers could be in line for pay rise in Autumn Budget

More than a million UK workers could be handed a pay rise of more than 6 per cent when Rachel Reeves delivers her first Budget on Wednesday.

Reports suggest the chancellor could be set to announce a significant increase to the minimum wage from next year, following recommendations from the independent Low Pay Commission.

Currently, the national minimum for those over 21 - known as the "national living wage" - is £11.44. Earlier this year, the Commission proposed an increase to £11.89.

READ MORE: Four Autumn Budget tax changes expected this week and what they mean for you

However, according to The Times, it could be set to rise to as much as £12.12 an hour in April next year after ministers pledged to "raise the floor" on wages, reports the Mirror.

Meanwhile, workers aged between 18 and 20, who currently earn £8.60 an hour, could see a bigger increase under government plans to scrap age brackets in favour of a single adult rate.

A Treasury source declined to comment on "speculation" around any upcoming Budget announcements.

Critics have suggested that the increase in minimum wage, coupled with other proposed measures like raising National Insurance rates for businesses, could result in employers delaying or cancelling hiring decisions.

Craig Beaumont, the executive director of the Federation of Small Businesses, said the rise in NI would significantly increase the costs of hiring new workers. He suggested small businesses could face an additional £600, calling the rise "a tax on pay, hours and jobs which would lead to recruitment freezes – or worse".

He said "Small business owners are among the hardest working people imaginable. They are strivers, working long hours to run their business and in many cases create jobs and opportunities."

However, Paul Nowak, the general secretary of the Trades Union Congress (TUC), believes that employees could handle the increase. Speaking to The Times, he said: "Every time the minimum wage goes up there are some voices who predict this will drive up unemployment. Every time they are wrong."