And we’re off…measures announced on eve of budget statement including increases to minimum wage

As advisers wait patiently to find out exactly what ‘smorgasbord’ of budget measures Chancellor Rachel Reeves will announce in the budget tomorrow, this evening we’ve already learned of a few of the measures that will be included. The Chancellor’s overarching aims for this latest fiscal event – a major one by any reckoning – appear to be to cut the cost of living, cut NHS waiting lists and cut the cost of debt.

Advisers can follow all our budget coverage here to make sure they get straight to the detail on IFA Magazine.

Earlier today on IFA Magazine, we published the views of many experts from across the industry, who shared their thoughts about which measures they thought tomorrow’s budget statement might bring that might be most on advisers’ radar.

While these latest budget revelations detailed below, aren’t exactly front and centre for advisers, they show the direction of travel.

The die is cast for the Chancellor to deliver a very detailed statement tomorrow, with even more detail in the subsequent Financial Statement and Budget Report (FSBR) or ‘red book’ which is released concurrently with the Chancellor’s speech.

As well as appearing to step back from a plan to hike income tax in the budget, so far, we’ve learned the following:

Rise in the minimum wage – with higher increases for younger workers

This evening the government has announced that minimum wage and living rates will increase next year, with the Chancellor having accepted the recommendations from the Low Pay Commission. From April, workers over 21 will see a 4.1% increase to their minimum wage, bringing it up to £12.71 an hour. Workers between 18 and 20 will see an 8.5% rise to £10.85 an hour. For 16 to 17-year-olds – and those on apprenticeships – there will be a 6% increase, bringing the minimum wage up to £8 an hour. These are on top of the National Living Wage increases which took effect in April 2025, although, whilst good news for employees, are likely to add to the mounting pressure of rising costs on business and SMEs in particular.

Minimum wage rise offers short and long-term financial benefits for low earners, says Mike Ambery, Retirement Savings Director at Standard Life as he comments on this change saying:
“The increase in the National Minimum and Living Wage rates will offer much-needed relief to low earners, many who are still struggling with persistently high living costs. For businesses, however, the above-inflation rise will likely add further pressure on those still managing the impact of last year’s Budget announcements which raised the cost of employment.

“Beyond the immediate pay boost, the increase also brings a longer-term advantage for savers through higher workplace pension contributions. While day-to-day expenses remain a priority for low earners, even modest savings through auto-enrolment can make a meaningful difference at retirement. A full-time employee earning the new National Living Wage could accumulate a pension pot worth around £208k* in today’s money terms by retirement age.”

Also commenting on this rise, Suzanna Kemal, Head of HR at Reward Gateway|Edenred comments: “The planned rise in the minimum wage is a welcome step forward in ensuring that everyone can earn a fair and decent living. While some have expressed concern about its proximity to graduate starting salaries, it’s important to remember that this cohort is at the start of a structured career path, often with extensive training and development opportunities. “At the same time, this increase highlights the need for a multi-generational workforce, where young people entering the labour market have real opportunities to get on the career ladder. Striking the right balance between rewarding experience, skills, and fair pay is essential. Paying people properly is the right thing to do, and this uplift is a positive move for the future of social mobility and workplace fairness.” 

Levy on overnight trips in England

A new levy on overnight trips has been announced so that England’s mayors will be able to apply the levy to invest in transport, infrastructure, and the visitor economy through applying it on overnight stays, announced this evening. Secretary of State for Housing, Communities and Local Government Steve Reed said:

“Tourists travel from near and far to visit England’s brilliant cities and regions.  

We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investing in these communities for years to come.”

England attracts over 130 million overnight visits each year.  Under plans set out today, any new levy would apply to visitors at accommodation providers including hotels, holiday lets, bed and breakfasts, and guesthouses.

Extension of the Soft Drinks Industry Levy

The government has also announced an extension of the Soft Drinks Industry Levy, also known as the ‘sugar tax’ to more high-sugar drinks, including pre-packaged milk-based drinks with added sugar, such as milk shakes and lattes. According to the government, many of these products can contain as much added sugar as fizzy drinks, where much of that sugar is added separately to the milk, but were previously exempt from the levy, which so far has seen the average sugar content of drinks in scope fall almost 50% since it was introduced. Plain, unsweetened milk and milk-alternative drinks are not and will not be included.

Of course, there’ll be a whole lot more announced tomorrow. Whether it’s a reduction in cash isa allowances from £20k to £12k, freezing tax allowances, changes on tax relief on pension contributions, on property taxation – including a ‘mansion’ tax, changes to taxation of gaming companies, changes for users of EVs, scrapping the 2 child benefit cap and many more areas. Will there be the rabbit out of the hat moment? We’ll just have to wait and see!

Just remember to check back in with us tomorrow for all the latest budget news and views HERE