The chancellor’s budget has implemented many changes for those under 25, especially students, including increases to the national minimum wage.
National Living Wage to increase
From April, minimum wages will go up with 18-20 year olds getting the biggest increase with an 85p rise to £10.85, while over 21s will get an additional 50p an hour, to take their pay to £12.71.
The government is trying to bring the wages of 18 to 20-year-olds in line with workers 21 and over, but businesses have warned that this increase could push prices up and lead to even more scarcity of work, as they put a freeze on hiring.
While this increase is one of positive progress, the current cost of living crisis still leaves many students working long hours alongside their demanding degrees.
Professor Sarah Brown, Head of the University of Sheffield’s School of Economics said: “It will be interesting to see how businesses react to the 8.5 percent (85 pence) in the 18-20 year old rate.
“Many businesses pay all workers the National Living Wage, regardless of age, however some businesses are unable to do this due to prevailing financial pressures. For example, the pressures faced by the hospitality sector, which employs a high proportion of young workers, are well documented.
“It will be interesting to see how such sectors respond to these changes over the coming months”.
Changes to student loans
From the 2026-27 academic year, Universities will be able to charge tuition fees up to £9,790, and £10,050 from 2027-28.
This change has been implemented by the Chancellor as evidence for government support for ‘financially struggling universities’, although you could argue that this change further dissuades students from taking out said loans to attend higher education.
The threshold for student loan repayments will be frozen from the 2027-28 academic year. Currently at £28,470 for students with loans taken out from September 2012 onwards, the threshold was reduced to £25,000 for students who started a degree after 2023.
This freeze means that workers earning above the amount will be dragged into larger repayments, than they would have had to make if thresholds rose with inflation; another deterrent for prospective students.
Reeves also announced a new international student levy, seeing universities charged £925 per overseas student from August 2028, with an exemption of the first 220 admissions.
The aim of this levy is to fund maintenance grants for disadvantaged students studying ‘priority courses’ such as degrees and technical qualifications.
These maintenance grants will be for students of lower-income backgrounds, with students with household incomes of under £25,000 receiving maximum support (£1,000 in years one and two, and £750 in the third year of the course).
Universities have called for the policy to be scrapped, as it undermines the very students who pay significantly higher fees than their UK counterparts, and combined with broader migration policy changes, there are fears this could deter international students choosing UK universities.
Freezing of rail fares
For the first time in three decades, regulated rail fares in England will be frozen until March 2027.
Typically, the fares are updated in line with inflation plus an added 1%, but the most recent increase in March 2025 saw a 4.6% increase.
Students will now need to wait to see if progress is made in implementing these changes.
