The UK government will raise the minimum wage across most workers but keep younger workers on a slower pay trajectory than promised, the BBC understands ahead of the Budget announcement.

The National Minimum Wage for 18-to-20 year-olds will rise 3.9% to around £11.27 per hour, according to the Times. The National Living Wage for workers aged 21 and over will also rise 3.9%, reaching £13.20 from the current £12.71.

The smaller increase for younger workers marks a slowdown from Labour's previous two years in office. Since returning to power in 2024, the government increased the rate for 18-to-20 year-olds by 26%, part of a manifesto pledge to remove age-based wage discrimination. Business Secretary Jonathan Reynolds said the government remains committed to equalisation "but we were always clear it could happen over time" and cited the need to balance wage pressures against labour market conditions.

Andrea Egan, general secretary of the union Unison, called the continued age differential "deeply unfair." She noted that 20-year-old care workers, teaching assistants and security guards perform the same work as older colleagues while earning less.

The Budget also includes cost-of-living measures. The government plans to remove import tariffs on 100 food items, targeting savings of up to £21 per year per household when combined with tariff suspensions introduced in June. Chancellor John Healey told the BBC: "None of this is going to change the world. But if it helps around the margins and its action the government can take, then I want try and fix it."

Additional measures announced include raising the tax-free mileage allowance for work driving from 25p to 35p per mile above 10,000 miles annually, and introducing a taper mechanism for carers' allowance earnings starting in 2030 to replace the current cliff-edge rule. Self-employed fathers will gain access to two weeks of paternity pay.

The government will freeze fuel duty again and extend the 5p duty discount that has continued since its 2022 introduction.

Shadow Chancellor Andrew Griffith dismissed the cost-of-living relief as insufficient. He said shoppers face rising costs at supermarket tills and families are struggling, characterizing the tariff removals as inadequate given Labour's earlier tax increases.