Overview
- This week the Centre for Policy Studies calculated that between 2024 and 2027 the annual cost to employers of a full‑time minimum‑wage worker rose by at least £4,462 and that costs for 18–20 year‑olds rose by about £4,859.
- The CPS also found employer costs for those aged 21 and over rose roughly 20% while costs for 18–20 year‑olds rose about 31%, figures that combine higher pay rates with changes to employer National Insurance.
- In response to slowing demand for young workers the government followed the Low Pay Commission’s advice to pause fast equalisation and set both youth and adult rates to rise by 3.9% from April 2027.
- Business groups warned higher payroll and tax bills will squeeze hiring and push up prices, while unions said the pause delays closing youth pay gaps and harms young people's living standards.
- Official data show vacancies have fallen below 700,000 and unemployment has risen since Labour took power, and the next Low Pay Commission recommendations will be watched for signs of further effects on youth hiring, small firms and consumer prices.