UK Considers Rollback of Youth Minimum Wage Amid Rising Unemployment
LONDON – The UK government is reportedly considering abandoning a pledge to extend national living wage parity to workers aged 18-20, a move prompted by growing concerns over youth unemployment and pressure from business groups. The potential policy shift, first reported by The Times on Wednesday, comes as new figures reveal a concerning trend in unemployment among young adults.
Data released Tuesday showed the unemployment rate for 18- to 24-year-olds reached 14% in the three months to December – the highest level in nearly eleven years, excluding the pandemic period. This figure underscores the economic challenges facing younger workers in a cost-of-living crisis.
Business groups argue that increasing the national living wage, alongside wider employment rights and national insurance contributions, is “pricing a generation of young people out of the workplace.” They contend that the rising cost of labour is discouraging employers from hiring younger, less experienced workers.
The Labour Party, which originally proposed equalizing minimum wage rates in its manifesto, has strongly criticised the potential U-turn. Shadow ministers are accusing the Conservative government of abandoning its commitments to young workers.
“This is a manifesto promise,” said Andy Prendergast, GMB’s national officer, in an interview on the BBC’s Today programme. “Younger workers are not less productive. Businesses hire on the basis of need. They don’t employ more young workers than they would older workers. And fundamentally I think this is the wrong prescription for the problem.”
Currently, the national living wage – the government’s term for the full minimum wage – applies to workers aged 21 and over. Those aged 18-20 receive a lower rate, officially designated as the national minimum wage, with a further reduced rate for those under 18.
The government maintains that no decision has been made. Welsh Secretary Jo Stevens, also speaking on the Today programme, dismissed the reports as “an unsourced briefing” and reiterated that government policy remains aligned with the manifesto pledge. However, sources suggest ministers are now exploring options, including slowing down the pace of equalisation, with a decision expected within months as part of the annual remit to the Low Pay Commission.
The Low Pay Commission advises the government on minimum wage levels. Any changes to the national minimum wage would have a significant impact on millions of workers and businesses across the UK.
The debate over youth unemployment and wage levels comes at a critical time for the UK economy, which is grappling with inflation and sluggish growth. The issue also has broader implications for social mobility and inequality.
Prime Minister Rishi Sunak is currently promoting plans for rail investment in Wales alongside First Minister Eluned Morgan, a move intended to boost economic opportunities in the region. Meanwhile, Robert Jenrick, recently appointed as Reform UK’s Treasury spokesperson, is scheduled to deliver a speech later today outlining his party’s economic vision.
This story is developing and will be updated as more information becomes available.
https://www.gov.uk/national-minimum-wage-rates
https://www.theguardian.com/business/2026/feb/17/uk-unemployment-rate-ons-interest-rates
https://www.thetimes.com/uk/politics/article/labour-minimum-wage-business-warning-0tm2fjk3n
https://www.bbc.co.uk/news/articles/c5y6g57j3meo
https://www.gov.uk/government/news/prime-minister-announces-seven-new-stations-and-major-rail-funding-commitment
https://www.theguardian.com/politics/robert-jenrick
