By Salma El-Sakka
Chancellor John Healey unveiled his Budget on Wednesday, outlining a series of measures aimed at young adults while leaving key issues such as youth unemployment and student debt unresolved. The announcements cover minimum wage adjustments, new savings incentives for first-time buyers, a pilot programme for young entrepreneurs, and a commitment to review student loan repayments.
Minimum wage rise
Workers aged 18 to 20 will see a 3.9% increase in the minimum wage from April, bringing their hourly rate to £11.27. Over-20s will receive a minimum of £13.21 an hour. The decision maintains the age-based disparity that Labour had previously pledged to eliminate. The rise also means a 21-year-old working full-time on the minimum wage with a post-2023 student loan will now surpass the £25,000 repayment threshold, triggering 9% repayments on earnings above that level.
First-time buyer boost
The Budget introduces a "First Time Buyer Isa" set to launch in 2029, replacing the Lifetime Isa. Savers can contribute up to £4,000 annually and receive a 25% government bonus. The existing £450,000 property price cap remains, but the new account removes penalties that previously caused savers to lose their own money on ineligible withdrawals; only government contributions would be forfeited. Penalties on existing Lifetime Isas will also be reduced. Additionally, the previously announced £4.7bn "Your First Home" scheme in England aims to help 70,000 individuals and couples purchase new-build homes with a 2.5% deposit and a 20% government loan, capped at £110,000 outside London and £140,000 in the capital.
Young Entrepreneurs Allowance
A pilot "Young Entrepreneurs Allowance" will be rolled out in England shortly, partially covering living costs during the first year of a new business. The chancellor said the scheme aims to level the playing field for young people with viable ideas but limited family financial backing. Detailed eligibility criteria and funding levels have not yet been published.
No help yet on jobs
More than one million 18-to-24-year-olds are currently not in employment, education, or training (NEET). Healey acknowledged the crisis but said solutions would await recommendations from Alan Milburn, who has warned of a "lost generation" and called for a "round of ammunition" rather than a single fix. Milburn's final report is expected later this year.
Student loans under review
Borrowers with Plan 2 loans taken out between 2012 and 2023 saw no immediate relief. Chief Secretary to the Treasury Emma Reynolds confirmed the repayment system is "under review" but said the government was unable to act in this Budget, citing an inherited system that is "difficult and unfair on young people."
