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Minimum wage increase takes effect
Approximately 2.7 million workers in the UK will receive a pay rise this week as the national minimum wage rises by 50p to £12.71 per hour for those aged 21 and over, the government announced.
New wage rates by age group
Workers aged 18 to 20 will see their hourly rate increase by 85p to £10.85, while under-18s and apprentices will receive a 45p rise, bringing their wage to £8 per hour.
Workers react to the pay rise
Young employees have expressed a mix of relief and concern about the changes. Ifunanya Ezechukwu, 25, called the increase a "step in the right direction," particularly in light of the rising cost of living.
"People need more money so they can actually afford the basics. I don't think employers paying staff more will necessarily translate to fewer jobs. They're probably just going to raise the prices of their services," she told BBC Newsbeat.
Alex McCarthy, an 18-year-old university student working part-time in a pub, said he was "very, very happy" about the rise but acknowledged it may not be enough for some peers struggling with living costs.
Amelia Evans, also 18, welcomed the increase but fears it could reduce job opportunities. "I've applied for about 20 jobs this year and haven't gotten any. I feel like it's going to impact me even more now," she said.
Businesses warn of financial strain
Employers, particularly in the hospitality sector, have raised concerns about the impact of higher wage bills. Spencer Bowman, managing director of Mettricks, a Southampton-based coffee shop chain, said while he supports fair pay, the increases are unsustainable for his business.
"There's nothing I'd want more than to ensure my team can earn a fair amount for a fair day's work. But the cost increases have got to be sustainable," he said.
Bowman cited rising business rates, national insurance, statutory sick pay, and expected energy cost hikes due to the Middle East conflict as additional financial pressures. "We're running on a minimum number of staff on shift. We can't run on fewer people. If something doesn't give, we will be closing sites," he warned.
Government and industry responses
The Low Pay Commission, the government body that recommended the increases, stated that previous minimum wage rises for over-21s had "not had a significant negative impact on jobs."
Business Secretary Peter Kyle defended the decision, framing it as a necessary step despite the challenges for businesses. "I am not going to progress our country and have it moving forward on the back of screwing down on low-paid workers," he said.
Lord Richard Harrington, chairman of Make UK, the UK manufacturing representative body, acknowledged the financial burden on employers but emphasized the importance of fair wages. "I don't think any of our members want to exploit working people and pay them a wage they can't live on," he told BBC Radio 4's Today programme.
Future wage policy under discussion
Ministers are considering whether to slow plans to equalize the minimum wage for all adults, regardless of age. The Labour Party had previously pledged in its election manifesto to remove "discretionary age bands" and raise wages for 18- to 20-year-olds to match those of workers over 21.
Prime Minister Sir Keir Starmer acknowledged the wage increase but stressed the need to "go further to bear down on costs."
