Rishi Sunak talking to Army troops during ITC Catterick visit 010621 CREDIT MOD
Chancellor Rishi Sunak announced the UK's economy is "firmly back on track" after the coronavirus pandemic (Picture: MOD).
Money And Finance

Armed Forces in line for pay rise with UK economy 'firmly back on track'

More than a million public sector workers are set to see their wages rise after the Government confirmed its pay freeze is being lifted.

Rishi Sunak talking to Army troops during ITC Catterick visit 010621 CREDIT MOD
Chancellor Rishi Sunak announced the UK's economy is "firmly back on track" after the coronavirus pandemic (Picture: MOD).

The Chancellor has paved the way for Armed Forces personnel to benefit from a pay rise next year.

In his fiscal statement on Wednesday, Rishi Sunak is set to confirm he will scrap the year-long public sector pay freeze, announcing that the UK's economy is "firmly back on track" after the coronavirus pandemic.

This means Armed Forces personnel and millions from the public sector can expect an increase in their pay.

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In March, the Chancellor's Budget speech confirmed that most British military personnel would go without an annual pay rise this year.

This followed the public sector pay freeze in November 2020, which was in response to heavy borrowing during the coronavirus crisis.

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

Earlier in October, Defence Secretary Ben Wallace said that all Armed Forces personnel who earn less than £24,000 a year – regular and reserve – will receive a pay rise of £250.

That boost is expected to be implemented in next month's salaries and will be back backdated to 1 April 2021.

Wednesday's Budget will also see an increase in the minimum wage for about two million workers, with those aged 23 and over to see their pay increase from £8.91 an hour to £9.50 as of April 1.

The 59p hourly boost to the 'national living wage' will mean a full-time worker on the lowest pay will receive a rise of more than £1,000 per year, according to the Government, in an inflation-busting 6.6% hike.

Critics have questioned how much better off workers will be considering the Chancellor has already hiked National Insurance and cut Universal Credit as inflation rises, with the consumer price inflation rate currently standing at 3.1%.

Mr Sunak increased National Insurance contributions for workers by 1.25% to help pay for the NHS and social care, while he 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."