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The minimum wage for those aged 21 years and over will rise by 6.7% to £12.21 – with pay for those aged 18 to 20 set to go up by 16.3% to £10 an hour.

Chancellor Rachel Reeves has confirmed the increases ahead of Wednesday’s budget, and they will take effect from April 2025.

The government says a full-time worker aged 21 and older will earn an extra £1,400 a year with the increase to what is known as the national living wage.

Budget latest: Chancellor’s praise leaves Hunt looking stunned

Increase in minimum wage

2024 2025
21 and over £11.44 £12.21
18 to 20 £8.60 £10
Under 18 and apprentice £6.40 £7.55

Minimum wage workers – those between 18 and 20 – are getting a greater proportional increase as part of government efforts to create in the future a single minimum rate for all adults instead of the current tiered system.

Their pay bump from £8.60 per hour to a flat £10 means a full-time worker will get an extra £2,500 in a year, the government says.

Ms 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.”

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Deputy Prime Minister Angela Rayner said: “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-year-olds on record.”

The announcement of the increases, which are based on recommendations from the Low Pay Commission, comes ahead of a budget in which the government says it will ensure “working people don’t face higher taxes in their payslips”.

Sir Keir Starmer has confirmed there will be tax rises in the budget to prevent a “devastating return to austerity” and rebuild public services.

The Low Pay Commission is an independent body that advises the government, although its remit is set by the government of the day.

Chancellor of the Exchequer Rachel Reeves during a visit to St George's Hospital, Tooting, London, ahead of the Government's first budget on Wednesday. Picture date: Monday October 28, 2024.
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Chancellor of the Exchequer Rachel Reeves during a visit to St George’s Hospital, Tooting, London, ahead of the government’s first budget. Pic: PA

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What’s likely to be in the budget?

The jump in the base wage rates and the expected increase to employers’ national insurance contributions in the budget have raised concerns about how businesses will be impacted with the new demands on their wage bills.

Many expect the national insurance rise to filter through to less take home pay for workers.

John Foster, chief policy and campaigns officer at the Confederation of British Industries, said the pressure of rising minimum wage rates would “make it increasingly difficult for firms to find the headroom to invest in the tech and innovation needed to boost productivity and deliver sustainable increases in wages”.

The increase to the national living wage is lower than over the past two years, with those aged 21+ seeing their wages go up by more than 9% each year.

However, the increase for younger members of the workforce is much greater.

Apprentices and those under 18 will be getting an 18% increase, with a pay bump from £6.40 to £7.55 an hour.

Business Secretary Jonathan Reynolds said: “Good work and fair wages are in the interest of British business as much as British workers.

“This government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth.”

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The government says the pay increases mean 3.5 million people will get a pay rise next year.

Baroness Philippa Stroud, the chair of the Low Pay Commission, said: “The government has been clear about their ambitions for the national minimum wage and its importance in supporting workers’ living standards.

“At the same time, employers have had to deal with the adult rate rising over 20% in two years, and the challenges that has created alongside other pressures to their cost base.

“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors.

“These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”

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Paul Nowak, the general secretary of the Trades Union Congress, said: “The government is delivering on its promise to make work pay.

“This increase will make a real difference to the lowest paid in this country at a time when rents, bills and mortgages are high.”

He added that “young workers deserve to be paid the fair rate for the job”.

“But hundreds of thousands of young workers are currently suffering a huge pay penalty – because of an outdated and discriminatory system,” he said.

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Angela Rayner: ‘Victim of misogyny’ or ‘freeloading’ deputy prime minister?

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Angela Rayner: 'Victim of misogyny' or 'freeloading' deputy prime minister?

To her most savage critics – from Tories to the far left – she’s “Rotten Rayner”, a tax evader, freeloader and a “low life… on the make”.

To her trade union friends, she’s a victim of misogyny who right-wing politicians are attempting to hound out because she’s working class.

And after her tearful interview on Sky News, even among some of her political opponents there’s a degree of sympathy for Angela Rayner too.

Politics latest: Why the deputy PM nearly resigned

But amid the rancorous debate among MPs about whether she should stay or go, there’s one part of her defence that is attracting scepticism from friends and foes.

That’s her claim that she was initially given duff advice by a solicitor. Really? If she has evidence to substantiate that, she may be in the clear, though there’d no doubt be accusations of an establishment stitch-up.

But if not – and the city grandee who’s the PM’s ethics adviser – the Eton and Oxford-educated baronet Sir Laurie Magnus – rejects her defence, she’ll almost certainly have to go.

And with her resignation – or sacking – would almost certainly go her hopes of succeeding the increasingly unpopular Sir Keir as Labour leader, despite her popularity with the party’s activists.

When she arrived for Prime Minister’s Questions, just half an hour after her bombshell confession, the Labour high command placed a collective arm around her.

Sir Keir Starmer, who told MPs he was proud to sit alongside a deputy PM from a working-class background, put his hand on her left shoulder.

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Beth Rigby on Angela Rayner’s uncertain future

Badenoch misses an open goal…

Lucy Powell, the leader of the Commons, sitting the other side of the beleaguered Ms Rayner, did the same on her right shoulder.

Rachel Reeves, who also knows all about being beleaguered and shedding tears in public, looked across at her and smiled sympathetically.

If Labour feared a brutal PMQs onslaught from Kemi Badenoch, they needn’t have worried. “Why is she still in office?” the Tory leader began. So far, so good.

“If he had a backbone he would sack her,” she said in the second of her six questions. But that was it. “But let us get back to borrowing,” she continued.

Inexplicably, the Tory leader ploughed on with her pre-prepared questions on government borrowing. Labour MPs couldn’t believe their luck. Cue numerous jokes about missed open goals.

After another dud Kemi-Kaze performance at PMQs, some MPs were even speculating that Ms Rayner’s survival prospects – slim, at best – remain better than those of the Tory leader.

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Badenoch calls on PM to sack Rayner

…but others go in studs up

But in the cruel world of social media, Ms Rayner was not spared a vicious onslaught from critics from across the political divide. You’d better keep your phone switched off, Angi.

From the spiky shadow foreign secretary Priti Patel, Ms Rayner was “the property tax dodging, freeloading deputy prime minister” who had “finally admitted breaking the law and evading paying taxes owed”.

There was more. “She says that she’s sorry,” said punchy Priti. “But she’s only sorry that she was caught out. Rotten Rayner should go.”

Nadhim Zahawi, who was sacked as Tory chairman in 2023 after an inquiry found he failed to disclose an investigation into his tax affairs, added: “Did you think about my children Angela Rayner?

“Breaks my heart seeing anybody distressed about their children, but the hypocrisy really does hurt.”

But it wasn’t just Tories – who let’s not forget were denounced as “Scum!” by Ms Rayner back in 2021, in what she described as “street language” – who were brutal.

The acerbic George Galloway declared: “She’s a lowlife”. For good measure, he claimed she was “on the make” and on “Supermarket Sweep, piling her trolley full”.

Read more:
Rayner admits she should have paid more stamp duty
Rayner came out fighting in Sky interview
Rayner’s tax affairs statement in full

However, from the trade union movement, which campaigned hard for the DPM’s workers’ rights legislation, there was unequivocal support.

TUC general secretary Paul Nowak told Sky News: “Angela Rayner comes under sustained coverage because she’s a working-class woman in a way that frankly Nigel Farage, leading members of the shadow cabinet, never would.

“I think there’s a real heavy dose of misogyny when it comes to Angela.

“I wouldn’t want to see a hounded out of an important role by right wing politicians and the right wing media who frankly can’t handle the fact that a working class woman is our deputy prime minister.”

There was sympathy from one party leader, Sir Ed Davey of the Liberal Democrats, who said that as a parent of a disabled child “I know the thing my wife and I worry most about is our son’s care after we have gone”.

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Shortly after PMQs, opening a Tory debate on, yes, property taxes, shadow chancellor Sir Mel Stride opted for ridicule and mockery. “I’m absolutely certain that the deputy prime minister had a good recess,” he began.

“We saw many photographs of her down at the seaside, just off the coast in a rubber dinghy, rather like many of the other photographs over the summer given the reckless policies this government has towards illegal migration.

“She was probably celebrating the acquisition of another property for her property empire, but perhaps also slightly tinged with that nagging doubt as to whether she had indeed paid enough stamp duty.

“Well, we’ll get to the bottom of that in due course.”

Quite so, Mel. We will.

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Angela Rayner’s tax affairs interview in full

A fight for survival

Let’s also reflect that on Monday Sir Keir Starmer proudly announced: “Phase two of my government starts today.” On Tuesday, he informed MPs, he was “speaking at length” to Ms Rayner. Must have been awkward.

And on Wednesday, the PM had to watch her tearful confession, just minutes before facing MPs in the Commons.

Not a great start to phase two, prime minister. Nor for his embattled and tearful deputy, who’s now fighting for political survival.

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Can Starmer live without Rayner?

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Can Starmer live without Rayner?

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The government minister responsible for housing didn’t pay enough tax on her house.

Sam and Anne let Angela Rayner’s admission sink in on this episode – as they wonder how much government business is on hold as a result.

The independent ethics adviser Laurie Magnus’ view on how she took inaccurate legal advice could be public within days – presumably that means the cabinet reshuffle has to wait until the Deputy Prime Minister knows her fate.

Never mind what else it might mean for the early days of Keir Starmer’s “phase two”.

But, whatever the outcome, is it safer for Starmer to keep Angela Rayner in a job?

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DIY retirement savers in Australia trim crypto nest eggs by 4%

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DIY retirement savers in Australia trim crypto nest eggs by 4%

DIY retirement savers in Australia trim crypto nest eggs by 4%

Australia’s tax office reports self-managed retirement funds have 4% less crypto than last year, but one crypto executive says the number is likely “undercooked.”

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