(qlmbusinessnews.com . Thu 27th Nov, 2025) London, UK —
How the New 'Milkshake Tax' and Minimum Wage Hike Will Affect You: UK Budget 2023 Insights
Chancellor Reeves Unveils Budget with Key Changes for Young Britons
In an ambitious budget announcement, Chancellor Rachel Reeves laid out her financial roadmap which promises significant shifts in the economic landscape, particularly for the nation's youth and minimum wage workers. Among the headline changes are a halt to income tax threshold adjustments, an increase in minimum wages, and the introduction of a controversial charge on high-sugar drinks, often dubbed the ‘milkshake tax'.
Young workers across various sectors are poised to benefit from these reforms, with those aged 18 to 20 set to receive the most substantial wage boost in April. Their pay will surge by 85p, reaching £10.85 per hour. Apprentices and those under 18 aren't left behind, with their wages rising by 45p to an hourly rate of £8. Additionally, workers over the age of 21 will see their pay packets increase by 50p per hour to £12.71. Reeves highlighted that approximately 2.7 million individuals would see an improvement in their earnings due to these adjustments, marking a significant step towards wage parity for younger workers.
While the wage increase has been broadly welcomed, there are concerns from the business sector that this could lead to higher consumer prices and a potential hiring freeze. The Resolution Foundation, a think tank, particularly cautioned that the considerable hike for those under 21 might impede their employment prospects.
Equally noteworthy is the chancellor's decision to freeze the repayment threshold for student loans from the 2027-28 fiscal year. Currently, graduates in England and Wales start repaying their loans once they earn above £28,470, a figure that will now remain static, potentially increasing the repayment burden as inflation rises.
Moreover, Reeves announced a £1.5 billion fund aimed at helping the 16 to 24 age group secure employment or training placements over the next five years, with a clear warning that refusal to engage might lead to a cut in benefits.
The budget also brings changes that will impact various aspects of daily life, from renting and online shopping to the purchasing of sugary drinks. Landlords will face a 2% increase in property income tax, a move that, despite its aim to level the tax playing field, has sparked predictions of a possible hike in rental costs due to reduced investment in the private rental sector.
Young Britons' venture into homeownership could see a positive shift with Reeves outlining a consultation for a new system to aid first-time buyers, potentially replacing the Lifetime Isa (Lisa) and making homeownership more accessible.
Adding to the fiscal mix is the chancellor's move to scrap a tax loophole affecting small parcels from overseas, anticipated to adjust online shopping costs, and the expansion of the sugar tax to include high-sugar milk-based beverages from 2028.
Exceptionally, there's good news for public transport users with the announcement of a freeze on regulated rail fares and a continued cap on bus fares, ensuring affordable travel remains in place until March 2027.
As the nation digests the multifaceted budget, the implications of these changes, from the workforce to the wallet, will become clearer, shaping the financial outlook for the United Kingdom's younger generations.
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