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Pay rise for millions Rachel Reeves announces in autumn budget as minimum wage to go up £1,400 a year

MILLIONS of workers will get a pay rise next year, the Chancellor Rachel Reeves has confirmed.

The Government is hiking the National Minimum Wage by 6.7% from April 1.

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The Chancellor Rachel Reeves has confirmed the National Minimum Wage will rise[/caption]
a graph showing the national living wage from april 2025
More than three million workers are set to get a pay rise as the National Living Wage goes up

In today’s Budget, the Chancellor confirmed the hike which is equal to £1,400 for three million people.

She said: “It was the Labour government that introduced the national minimum wage in 1999.

“It had a transformative impact on the lives of working people.

“As promised in our manifesto, we asked the Low Pay Commission to take account of the cost of living for the first time.

“I can confirm that we will accept the Low Pay Commission recommendation to increase the National Living Wage by 6.7% to £12.21 an hour.”

Meanwhile, the National Minimum Wage for 18 to 20-year-olds will be hiked from £8.60 to £10 an hour – the biggest increase in the rate on record, the Chancellor confirmed.

It will see eligible youngsters in full-time employment earn an additional £2,500 a year.

MINIMUM WAGE SHAKE-UP

There are currently two different minimum rates all workers are supposed to get across the UK – National Minimum Wage and the National Living Wage.

The National Minimum Wage (NMW) is the minimum pay per hour for workers who have left school.

As it stands, those who have left school and are aged under 18 must get a minimum of £6.40 an hour.

Meanwhile, the National Living Wage is the minimum wage for those over 21 and is slightly higher.

It was previously only available to those over 23, but this was adjusted to 21 and over in November 2023.

It’s currently worth £11.44 an hour but this will change from April 1, 2025.

Both the National Living and Minimum Wage rise each year so workers’ pay keeps up with the cost of living.

What's the Real Living Wage?

Unlike the National Minimum Wage and National Living Wage, the rate is not a legal requirement and is voluntary.

Over 15,000 UK businesses voluntarily pay it because they believe their staff deserve a wage that meets everyday needs.

Those working for employers subscribed to the scheme can expect to earn £12 an hour or £13.15 an hour is they’re based in London

Who gets the National Minimum Wage?

You qualify for the National Minimum Wage if you are of school leaving age, which is usually above 16.

You are eligible to receive the pay rate if you work full-time or part-time.

Apprentices also qualify for a National Minimum Wage, as well as trainees and staff still in their probationary period.

The rates also apply to disabled workers.

Those who are self-employed, voluntary workers, company directors, and family members who live in the home of the employer and do household chores do not qualify for the minimum wage.

Au pairs, members of the armed forces, and people on a government employment programme are also not entitled to the payment.

WATCH RACHEL REEVES ON NEVER MIND THE BALLOTS

By Ryan Sabey, Deputy Political Editor

RACHEL Reeves will be grilled in a special Budget edition of The Sun’s Never Mind The Ballots show today.

Our Political Editor Harry Cole will put the Chancellor on the spot shortly after she’s finished delivering her crucial address in the House of Commons.

It will be available to watch on thesun.co.uk, YouTube and Sun social channels at 5.30pm.

Topics will include her decision on whether to spare motorists a fuel duty rise, and the expected eye-watering tax rises she will impose.

Since its launch earlier this year, NMTB has cemented its place at the heart of British politics.

During the General Election campaign The Sun was the only print publisher to host back-to-back grillings of Rishi Sunak and Sir Keir Starmer.

Footage from The Election Showdown has been viewed over 15 million times.

NMTB has also featured interviews with ex-PMs Boris Johnson and Liz Truss, as well as senior politicians Nigel FarageJames CleverlyWes StreetingSteve Reed and Bridget Phillipson

BRITAIN’S MOST MEMORABLE BUDGETS

By Harry Goodwin

Today is the first Labour budget for 14 years – and the first ever to be delivered by a female Chancellor.

Brits are bracing for a raft of tax hikes as Rachel Reeves tries to plug the “£22billion black hole” she says she’s found in government accounts.

Here are five other budgets which have caused a stir over the years.

1979 – Geoffrey Howe, Conservative

Margaret Thatcher’s Chancellor Geoffrey Howe slashed both the top rate of income tax and the standard rate.

He also doubled VAT – shifting the tax burden from income to consumption in a huge change for Brits.

Howe also eased controls on foreign exchange in a bid to control inflation.

The budget signalled a massive break from the last Labour government and set the pattern for decades to come.

1988 – Nigel Lawson, Conservative

Nigel Lawson (dad to domestic goddess Nigella) massively slashed income tax again.

The deputy Commons speaker twice cleared the chamber amid noisy protests from Labour MPs slamming the tax cuts.

Lawson also set off a property bonanza by announcing an end to double mortgage tax relief for couples buying homes.

1993 – Norman Lamont, Conservative

In March 1993 the economy was still reeling from Black Wednesday, when the pound crashed out of the European exchange rate mechanism.

Lamont announced tax rises including VAT on domestic gas and electricity.

Later that year Lamont’s successor Ken Clarke froze personal tax allowance and brought in stealth taxes on insurance and plane passengers.

The Lamont and Clarke budgets marked the end of the Tories’s scything tax cuts – and set the stage for Labour’s return to office in 1997.

2002 – Gordon Brown, Labour

Brown raised national insurance by a penny on the pound to fund higher spending on the NHS.

The future PM had fretted over a possible backlash from voters who had re-elected Labour in 2001.

But he managed to pull off the largest rise in health spending in the history of the NHS.

2009 – Alistair Darling, Labour

Labour’s last budget before today came amid the credit crunch and soaring unemployment.

Darling ramped up taxes and borrowing in a bid to fill up draining Treasury coffers.

Tory leader David Cameron blasted Labour’s ‘utter mess’ – and was in power a year later.

2022 – Kwasi Kwarteng, Conservative

Kwarteng unveiled his economic package less than a month after becoming Liz Truss’s Chancellor.

Technically, it was a fiscal statement rather than a budget – but it turned out to be just as seismic.

Rising Tory star Kwarteng announced £45billion in tax cuts including a drop in all rates of income tax.

Markets took frights and the pound went into freefall before the Bank of England waded in to stop a run on UK pension funds.

Mortgage rates soared and Kwarteng was out of the job just three weeks later.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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Thousands of Brits get extra cash as Chancellor reveals huge carers allowance shakeup in Budget

AN extra 60,000 carers will be able to claim government cash after changes announced at today’s Budget.

Rachel Reeves said she will raise the limit people can earn before being ineligible for the carers allowance from £151 a week to £181.

a man holds the hand of an elderly woman who is holding a cane
The £30 uplift will be the largest increase in the threshold since the benefit
a poster showing the winners and losers of a briefcase

The £30 uplift will be the largest increase in the threshold since the benefit was introduced in 1976.

It is the equivalent of 16 hours a week for people on the living wage.

Ms Reeves said: “That means a carer can now earn over £10,000 a year while receiving Carer’s Allowance allowing them to increase their hours where they want to and keep more of their money.”

WATCH RACHEL REEVES ON NEVER MIND THE BALLOTS

By Ryan Sabey, Deputy Political Editor

RACHEL Reeves will be grilled in a special Budget edition of The Sun’s Never Mind The Ballots show today.

Our Political Editor Harry Cole will put the Chancellor on the spot shortly after she’s finished delivering her crucial address in the House of Commons.

It will be available to watch on thesun.co.uk, YouTube and Sun social channels at 5.30pm.

Topics will include her decision on whether to spare motorists a fuel duty rise, and the expected eye-watering tax rises she will impose.

Since its launch earlier this year, NMTB has cemented its place at the heart of British politics.

During the General Election campaign The Sun was the only print publisher to host back-to-back grillings of Rishi Sunak and Sir Keir Starmer.

Footage from The Election Showdown has been viewed over 15 million times.

NMTB has also featured interviews with ex-PMs Boris Johnson and Liz Truss, as well as senior politicians Nigel FarageJames CleverlyWes StreetingSteve Reed and Bridget Phillipson

Carers Allowance is an £81.90 weekly bung for people looking after a severely disabled child or adult.

The current earnings cap of £151 a week after income, national insurance and expenses has been criticised as far too low.

It has seen many selfless carers unknowingly bust the limit and later told to repay large sums of their benefits.

Work and Pensions Secretary Liz Kendall had launched a review of the overpayments scandal.

The raised earnings cap will reduce the likelihood of carers earning over the maximum.

The Sun first revealed the changes were expected at the Budget last week – and it was welcomed by campaigners.

Helen Walker, Chief Executive of Carers UK, said: “We found 4 in 10 unpaid carers were pushed out of work because of problems with the earnings limit, plunging many into poverty.

“This new measure will help many more unpaid carers up and down the country to stay in paid work, putting much needed finances into families’ pockets.”

Martin Lewis said: “Good news. The Carers Allowance earnings threshold will be increased from £151 to at least £181 in the #Budget tomorrow, starting April 2025.

What is carer's allowance?

CARER’S allowance is a UK benefit designed to help people who have caring responsibilities for more than 35 hours each week.

Those eligible get £81.90 a week paid directly into bank accounts.

To qualify, the person you care for must already get one of these benefits:

  • Personal independence payment (PIP) – daily living component
  • Disability living allowance – the middle or highest care rate
  • Attendance allowance
  • Constant attendance allowance at or above the normal maximum rate with an Industrial Injuries Disablement Benefit
  • Constant attendance allowance at the basic (full day) rate with a war disablement pension
  • Armed forces independence payment

You don’t have to be related to the person or live with them to apply.

But if you share caring responsibilities with someone else, only one of you can make a claim.

The type of care you provide can vary, but includes things such as helping with washing or cooking, taking the person to medical appointments or helping out with household tasks such as shopping or organising bills.

To get the benefit, you must also meet a certain set of criteria:

  • You must be 16 or over
  • You have to spend at least 35 hours a week caring for someone
  • You need to have been in England, Scotland or Wales for at least two of the last three years (this does not apply if you’re a refugee or have humanitarian protection status)
  • You must normally live in England, Scotland or Wales or live abroad as a member of the armed forces (you might still be eligible if you’re moving to or already living in an EEA country or Switzerland)
  • You cannot be in full-time education
  • You must not be studying for 21 hours a week or more
  • You cannot be subject to immigration control
  • You will also have to meet certain earnings criteria in order to get the benefit.

Your earnings must also be £151 or less a week after tax, National Insurance and expenses.

You can apply for the carer’s allowance online by visiting www.gov.uk/carers-allowance/how-to-claim.

“So carers can earn more and still receive the allowance.”

It comes as households on carer’s allowance continue to face substantial repayment demands after exceeding a critical weekly earnings limit.

Figures in August revealed that over 134,500 unpaid carers are collectively repaying £251million in benefit overpayments.

The Sun has previously highlighted cases where some individuals were required to repay up to £20,000 after unknowingly breaching carer’s allowance rules.

In an effort to reform the system and prevent more people from being caught out, the Department for Work and Pensions (DWP) has initiated an independent review on the matter.

In response to the overwhelming number of repayment demands issued to claimants, the DWP’s independent review, in collaboration with the former chief executive of Disability Rights UK, aims to investigate the causes and mechanisms behind the overpayments.

It will then recommend “operational changes” to minimise the risk of future overpayments and outline how the DWP can best support those affected by overpayment issues.

a graph showing the national living wage boost

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