Key facts
- The annual cost of employing a minimum wage worker rose by £4,462 between 2024 and 2027, per CPS estimates.
- Chancellor John Healey announced a 3.9% rise in the National Living Wage in the Budget on October 28.
- The National Living Wage was set to rise from £12.71 to £13.20 an hour from April 2027 for workers aged 21 and over.
- Beauty salon owner Allison Hudson said the rise would add around £20,400 a year to her business costs.
The annual cost of employing a single worker on the minimum wage rose by £4,462 between 2024 and 2027, according to estimates by the CPS cited in a report. The figure was reported alongside the Budget announcement on Wednesday, October 28, in which Chancellor John Healey set out a 3.9% increase in the National Living Wage.
The National Living Wage was set to rise from £12.71 to £13.20 an hour for workers aged 21 and over from April 2027. The government estimated that a full-time worker on the National Living Wage could earn an extra £910 a year before tax, and around 2.3 million workers were expected to benefit from the rise. Healey also announced plans to remove business rates for around 70,000 small firms by raising the relief threshold.
Allison Hudson, who runs Faces beauty salon in Colchester, Essex, with her husband Wayne, said the 49p increase would add around £1,700 a month to the salon's running costs, or £20,400 over a year. The couple employ 13 members of staff. Hudson said the salon would not qualify for the business rates relief and that in some months she and her husband cannot afford to pay themselves, living on his state pension instead. She said: "We are bitterly disappointed. There was nothing beneficial for us."