In a forthcoming announcement, Rachel Reeves is expected to reveal a 6% increase in the national minimum wage for 2025, benefitting over 1 million low-paid workers.

This rise will see the 'national living wage' for those aged 21 and over climb to £11.44 per hour, with a future increase to over £12.12 as part of the government’s commitment to elevate wage floors.

The move responds to advice suggesting that younger workers aged 18 to 20 should eventually receive wages equal to older counterparts.

Despite the positive impact on workers' pay, businesses are concerned about the concurrent rise in national insurance contributions, which may heighten overall wage costs.

The Low Pay Commission initially proposed a 5.8% increase, but government sources indicate a hike of up to 6%.

Reaction to the announcement is mixed; the Resolution Foundation sees it as good news for low earners, while businesses, represented by the Federation of Small Businesses, express concern about the added financial burden.

Amidst claims that the increase might lead to higher unemployment, TUC’s Paul Nowak argues the benefits to local economies outweigh potential drawbacks.

The Treasury has refrained from commenting on speculated fiscal measures ahead of the official budget release.