Labour announces £1,400 pay rise for workers

Ahead of the Budget, the government has announced that over 3m workers will receive a pay rise from April 2025, with the National Living Wage increasing by 6.7% – from £11.44 to £12.21 an hour.

This move has been welcomed by one expert, who highlighted that along with traditional employees, 700,000* of the UK’s flexible workers – such as contract workers operating through umbrella companies – stand to benefit. The government has said the change will be worth £1,400 a year for eligible full-time workers.

Additionally, the National Minimum wage, for 18-20 year olds, will increase from £8.60 to £10 an hour – the largest rise on record and will boost full-time eligible workers’ income by £2,500 annually.

Seb Maley, CEO of Qdos, an insurance provider for flexible workers, said, “The lead up to the Budget has been dominated by negativity, but this is a good news story for payrolled workers – and a change that could make a real difference in isolation.

“This increase to the National Living Wage won’t just benefit traditional employees – 700,000 or so flexible workers operating via umbrella companies will also see their take home pay increase.

“In truth, it couldn’t have come at a better time, especially for the hundreds of thousands of temp workers who, in recent years, have struggled to make ends meet.

“Now the government must deliver for millions of other flexible workers – the self-employed – who won’t benefit from this change. Time and time again and in Budget after Budget, they slip through the cracks. Rachel Reeves has an opportunity to support the 4.2m people working for themselves – it’s imperative that she seizes it.”

Chancellor Rachel Reeves said, “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”

Deputy Prime Minister, Angela Rayner, added, “A proper day’s work deserves a proper day’s pay. Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”