UK Budget 2025: PwC Comments on the increase to National Minimum Wage

Anna Vishnyakov, Workforce partner, said:

“Employers, especially those in retail and hospitality, where many staff earn near the minimum wage, must carefully plan how to handle these increases while staying competitive and compliant. Many employers will note that this year's increases are smaller than previous years. The higher increase is focused on workers aged 18-20 as the Government moves to bring wages for this group in line with workers who are 21 and over. Although this was anticipated, it is reassuring to many that the changes are being staggered in their introduction.

“It is expected that the Chancellor will announce additional National Minimum Wage protections in the Budget, signalling a strong stance on pay compliance, with tougher enforcement. Employers should take action now looking beyond the headline rate of pay and into working practices, benefit structures and payroll operation.

“Many workers and employers have been waiting for the announcement of these rates. Employers will need to build this into their budgets for next year and consider the implications across their workforce as this adds pay pressure up the pay scales. It will be critical for employers to think about their overall reward package to ensure that they remain competitive.”