Millions of Brits set to get a pay rise this week – here’s who will be affected

UK minimum wage set for potential 2027 boost

However, the next planned increase could bring a change for younger workers, who have received larger percentage rises than older employees in recent years.

According to The Times, Chancellor John Healey is expected to announce in Wednesday’s Budget that the National Living Wage will rise by 3.9% in 2027. 

This would take the hourly rate for workers aged 21 and over from £12.71 to around £13.20.

The National Minimum Wage for those aged 18 to 20 is also expected to increase, rising from £10.85 to approximately £11.27 an hour. If approved, the new rates would begin in 2027.

Employers may think twice about hiring younger workers

The expected changes come as concerns grow that higher wage costs could make employers less willing to hire younger workers. 

Some businesses and analysts have linked minimum wage levels for younger people to rising youth unemployment.

The government has already made changes to how pay rises for younger workers are decided. 

In March, it gave the Low Pay Commission, which advises ministers on minimum wage rates, more freedom to consider the state of the jobs market when making recommendations for 18- to 20-year-olds.

In April, the commission estimated that the National Living Wage would need to rise by around 3.7% to £13.18 an hour in 2027 to keep up with expected growth in average pay.

If the reported increases go ahead, younger workers would no longer receive larger percentage pay rises than those aged 21 and over.