UK Labour’s Autumn Budget, led by Chancellor Rachel Reeves, has unveiled sweeping changes aimed at addressing the financial pressures felt by students and public services alike. Announced amid rising living costs, this budget outlines increased spending on education and tweaks to taxes which, according to Labour, will provide both relief and new challenges for the country’s youth.
A core element of the budget is the substantial boost to workers’ minimum wage. For students juggling classes and part-time jobs, the 6.71% hike to £12.21 per hour for those over 21, and the jump from £8.60 to £10 per hour for 18 to 20-year-olds, may ease some of the financial strains associated with day-to-day expenses and skyrocketing rents. It’s part of Labour’s larger goal to establish what they call a “genuine living wage” for all working individuals. This move is particularly welcomed by students who rely on part-time work to support their educational pursuits.
While changes to wages are seen as largely positive, there’s chatter surrounding Labour’s decision to cut the tax on draught beer by 1.7%. This slight adjustment—anticipated to lead to roughly 1 penny off the price of pints—seems more symbolic than substantive, especially since around the same period, inflation and other living costs continue to rise. Many students who frequent local pubs might find it hard to feel any significant financial relief from this cut, which some critics argue does little to ease financial burdens overall.
Tax hikes also form part of the budget, particularly on smoking and vaping products. Starting from October 2026, vape liquid will face charges of £2.20 per 10ml, and tobacco taxes will rise 2% above inflation, meanwhile the tax on hand-rolling tobacco will increase dramatically by 10% above inflation. These increases aim to encourage healthier choices among the public, according to Reeves, who mentioned these measures could raise nearly £1 billion annually for public expenditure. Yet, these hikes have sparked criticism, termed the government as implementing a “Nanny State” strategy, which some believe unfairly penalizes young individuals, particularly students.
On the brighter side, Labour is significantly upping its investments within the education sector. A mention-worthy promise of £300 million is slated to fortify higher education, augmenting the total education spending by 19%. This infusion of cash aims to stabilize UK higher education during financially uncertain times, promising improvements to facilities and resources available to students.
For those students near graduation, there’s unease surrounding the job market marked by new changes to national insurance rates. The employer’s national insurance will see increases by 1.2 percentage points to 15%, something experts warn could tighten the availability of roles for new graduates. This complicates the outlook on securing solid job positions, especially for those whose entry-level prospects depend on businesses balancing their financial commitments.
Overall, the budget paints mixed prospects for students as immediate financial relief does juxtapose more complicated long-term scenarios. While there’s optimism about improved public services and higher wages, students must remain vigilant about the somewhat unpredictable employment market they are facing. With economists predicting brief bursts of growth, the reality of job availability could become grim, reinforcing fears about future employability.
Judging by immediate effects, students may feel the pinch as tobacco prices rise, even as changes to vape taxes take some time to kick in. And, as for the much-anticipated beer tax cut? Let’s say it’s not transformational enough to leave students cheering at their local pubs anytime soon.
