Workers aged 18 to 20 will remain on a lower minimum wage than older workers in 2026, while the point at which their pay may be brought into line remains uncertain. In last week’s Budget, the government awarded both groups a 3.9% increase, setting the rate for 18- to 20-year-olds at £11.27 an hour and the minimum for over-20s at £13.21.
John Healey, the Chancellor, indicated that the government was moving cautiously because it must weigh higher wages against their possible effect on jobs for younger people. “I want to make sure we can look hard at those trade-offs that are there between jobs and wages,” he said.
Labour promised in 2024 to remove “discriminatory age bands” and end the difference between the adult minimum wage and the rate for 18- to 20-year-olds.
But the Budget maintained separate rates. Healey had said younger workers would receive the same increase as older workers, leaving the gap in place this year.
On Sunday, Healey was interviewed on the BBC’s Sunday with Laura Kuenssberg programme. Asked whether younger workers would be paid the same minimum wage as older workers by the next election, he replied: “We'll take one step at a time.”
He denied that Labour would break its manifesto commitment, while casting the timetable as unsettled. “There is no question about whether or if, it's a question of when - it's a question of how fast,” he said.
Healey, who said he had legislated as a new MP for the national minimum wage when it was first introduced in 1998, said he wanted businesses, trade unions and government involved in deciding the pace of change. He described “a million youngsters - written off without any prospect of being helped into work and making contributions to this country for the future.”
The approach has brought pressure from within Labour. Angela Rayner, the housing secretary, warned the government in June that it must deliver on wage equalisation for younger workers. Unions had already raised concerns that the promise could be delayed, and the change is likely to anger unions and some on the party’s left.
Emma Reynolds, the chief secretary to the Treasury, defended the government’s approach. She told LBC: ‘Since the election we have reduced the gap by a third between the minimum wage for young people as you've talked about and that for those over the age of 21’. She added: ‘As the Chancellor said, we will do this in a careful way and we'll do it step by step’.
Separately, Reynolds said on GB News on Sunday that the government would not make ‘crude cuts’ to welfare to balance the books.
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