Public sector workers set for pay rise

Some UK workers are in line for a pay rise in the Budget as the Chancellor said the economy is "firmly back on track" after the Covid pandemic.

Rishi Sunak has confirmed he will scrap the year-long freeze on public sector pay in his statement on Wednesday.

Teachers, nurses, armed forces personnel and many others could receive a wage increase from next year.

According to the latest available data from the Office for National Statistics (ONS), there were 5.68 million public sector workers registered in June 2021.

Last November, the Chancellor "paused" public sector pay increases for 2021/22, after heavy borrowing during the pandemic.

The NHS was not affected by the pay freeze and neither were those earning less than £24,000 per year.

But Mr Sunak on Monday said that, with the economy bouncing back following the lifting of virus restrictions, it was “right” that frontline workers would “see their wages rise”.

How much of an increase will public sector workers get?

The Chancellor has not set out how much wages will be boosted by, with the rises set to be announced next year following recommendations from independent pay review bodies.

And business minister Paul Scully refused to guarantee the increases would be above the level of inflation.

“That will be determined by the pay review bodies. The Chancellor is keen to give people a rise,” he told Sky News.

“They will then take that into account as they look to what should be an appropriate rise for the public sector, given the public finances.

“I can’t pre-empt what they are going to do. We will see where we are come next April when the review bodies have reported.”

National Insurance increase and ending the Universal Credit uplift

Critics have questioned how much better off workers will be considering the Chancellor has already raised National Insurance and cut Universal Credit as inflation rises.

Mr Sunak increased National Insurance Contributions for workers by 1.25% to help pay for the NHS and social care.

He also ended the £20-a-week Universal Credit coronavirus uplift earlier this month.

In a statement announcing his decision to scrap the public sector pay freeze, Mr Sunak said: "The economic impact and uncertainty of the virus meant we had to take the difficult decision to pause public sector pay.

"Along with our Plan for Jobs, this action helped us protect livelihoods at the height of the pandemic.

"And now, with the economy firmly back on track, it's right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise."

Increasing the National Living Wage

The Government also recently announced it will increase the minimum wage for around two million workers, with over-23s seeing their pay increase from £8.91 an hour to £9.50 as of April next year.

The increase means that a full-time worker on the living wage will get a pay rise of more than £1,000 per year, according to the Government, in an inflation-busting 6.6% hike.

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• budget 2021