The rise in the minimum wage is expected to be announced in the Budget, but 18-to-20 year-olds are set to see lower increases than in previous years, the BBC understands.
Pay for younger workers will rise in line with the increase in minimum pay for employees aged 21 years and over.
However, the increase for younger workers is lower than that seen in the previous two years, when Labour raised the rate to meet a manifesto promise that it would remove “discriminatory age bands” with all adults entitled to the same minimum wage.
Chancellor John Healey is also announcing measures to give families what he is calling “breathing space” with the cost of living.
“The manifesto pledge on equalisation still applies but we were always clear it could happen over time,” Business Secretary Jonathan Reynolds told the BBC:
“Of course, you want not just good wages but good work, ” he added. “It is a balance of making sure the pressures on the labour market are taken into account.”
The Times reported that the National Minimum Wage for 18-to-20 year-olds is likely to rise by 3.9% from £10.85 an hour to around £11.27.
That is a smaller rise than the 26% increase the Labour government has put in place for younger workers since returning to power in 2024.
Even after the reported rise, the rate remains below the National Living Wage for older workers, which is currently £12.71 an hour. It is set to rise by 3.9% to £13.20, the Times said.
Andrea Egan, general secretary of the union Unison, said it was “deeply unfair” to keep paying different rates for the same job.
“Twenty year-old care workers, teaching assistants and security guards do the same work as their older colleagues,” she said. “They don’t pay less in the supermarket or at the petrol pump. They must be paid equally.”