Chancellor John Healey is expected to unveil plans on Wednesday to raise the minimum wage by nearly 4 per cent, according to reports.
The UK’s National Living Wage, which applies to workers aged 21 and over, is set to rise by 3.9 per cent, moving from £12.71 to around £13.20 ($17.63) per hour, The Times reported.
Meanwhile, the National Minimum Wage for those aged 18, 19 and 20 will increase broadly in line with older workers, rising from £10.85 to approximately £11.27 an hour.
The Treasury declined to comment on the reports.
If confirmed in Wednesday’s budget statement, the rises would take effect in 2027 and would signal the end of younger employees receiving larger percentage increases than their older peers amid warnings young people are being priced out of employment.
Britain's minimum wage is one of the highest among advanced economies as a share of median earnings, following efforts by successive governments to lift it to two-thirds of median hourly pay.
Some analysts and employers have previously pointed to the rate payable to younger workers as a cause of increasing youth unemployment.
In April, the Low Pay Commission, which advises the government on minimum wage rises, said the National Living Wage would probably need to increase by around 3.7 per cent in 2027 to £13.18 an hour to keep up with how it expected average pay to rise.
In March, the government tweaked the commission's remit to give it more scope to take labour market conditions into account when setting the minimum wage for 18- to 20-year-olds.
Earlier on Monday, prime minister Andy Burnham said the Budget will set out a path for defence spending to hit 3 per cent of national income by 2030.
He added that national security was “at the top of the priority list” ahead of the autumn statement.
Opposition critics and military figures have urged the government to commit to a path for defence spending to reach 3 per cent of gross domestic product (GDP) by the end of the decade, along with a Nato pledge to hit 3.5 per cent by 2035.
The Chancellor, who resigned as defence secretary over a dispute about the pace and extent of military funding earlier this year, has previously said the timetable will be detailed at next year’s spending review rather than the Budget.
The chancellor has also revealed he will slash cost of certain supermarket staples, including baked beans, gherkins and chocolate as part of five “everyday fixes” as part of the Budget.
Tariffs on a range of foods will be slashed to bring down their prices, the chancellor and prime minister have announced as part of a series of measures to address heightened living costs, expected to be included in Wednesday’s budget.
Mr Healey will also lock in the 55p mileage rate for those who have to drive for work, for the first 10,000 miles.
He said :“Today's everyday fixes are just a small part of what we are doing to give families a bit of breathing space.
"Conflict in the Middle East and Europe is hitting families here at home through higher everyday costs.
“We can’t control global events, but we can act where we can make a difference.”
