This week, the Government has announced their commitment to a genuine living wage as part of their plan to Make Work Pay. For the first time, the Low Pay Commission (LPC) will factor the cost of living when deciding the Minimum Wage and Living Wage rates in a move to put more money in working people’s pockets.
The Government will also take steps towards making rates the same for everyone, regardless of age, by narrowing the gap between the National Minimum wage and the National Living wage. At the time of writing, the National Minimum Wage for 18-20 year olds is £8.60, whereas the National Living Wage for those 21 and over is £11.44.
Each year the Low Pay Commission collates evidence regarding both the rates and makes recommendations to the Government. Youth Employment UK has given evidence for the last four years. As part of Youth Employment UK’s response to the call for evidence this year to inform rates in April 2025 we recommended:
- Rising cost of living and the National Minimum Wage: We have heard at length from young people about the challenges faced regarding rising costs. Most young people felt that the minimum wage rate of £8.60 simply is not enough to make ends meet and must be reviewed to ensure young people can cover their essential costs.
- Reducing the age bracket of the National Living Wage for 18+: Through our youth voice activities, young people strongly expressed that since 18 year-olds are considered legal adults, they should be paid enough to support themselves independently.
- Consider raising the Apprenticeship rate: Young people shared that low wages may exclude young people from taking up apprenticeships. This year’s apprenticeship uptake figures of just 28.9% of under 19s means more needs to be done to ensure apprenticeships are an attractive option to young people.
Therefore, in line with our recommendations to the Low Pay Commission, we are pleased to see the announcement of removing discriminatory age bands and increasing rates. Young people face the same cost of living pressures as other adult workers and it is highly welcomed that their pay will be brought into line to reflect this.
Whilst it is positive to see the National Minimum Wage factor in the cost of living for the first time, there is a need for the Government to be careful during the roll-out and consider the impacts more broadly. There is a risk to employers in terms of affordability. It will be important for the Government to work with employers and organisations to ensure that the quality of work is not compromised as a result of rising wages.
