What the Budget means for Birmingham's under-25s

Young people in Birmingham will see a pay rise, new help to buy a first home and support to start a business under today's Budget, but students hoping for action on their loans, and young people out of work, will have to wait.

Young people under 25 make up around 40 per cent of Birmingham's population, so the measures aimed at them matter here. This is what the Budget means for them.

A pay rise from April

From next April, 18 to 20-year-olds on the minimum wage will get a 3.9 per cent rise, taking their hourly rate to £11.27. Over-20s will receive the National Living Wage of £13.21 an hour.

The rise is smaller than some young workers had expected. The government had promised to do away with "discriminatory age bands" so all adults would get the same minimum wage, but this year 18 to 20-year-olds will see the same percentage increase as older workers, so the gap remains.

One knock-on effect: a 21-year-old working full time on the minimum wage who took out a student loan after 2023 will now earn enough to pass the £25,000 threshold, above which they start repaying 9 per cent of their earnings.

Help with a first home

A new First Time Buyer ISA will let savers build a deposit, with the government adding a 25 per cent bonus on up to £4,000 a year. It arrives in 2029, replacing the Lifetime ISA, and savers will only lose the government's contributions, not their own money, if they withdraw for something other than a first home. The penalty on existing Lifetime ISA withdrawals is also being lowered.

The Your First Home scheme will help people buy a new-build home with a 2.5 per cent deposit and a government loan worth 20 per cent of the property's value, capped at £110,000 outside London. It aims to help 70,000 people.

Backing young entrepreneurs

For young people with a business idea, the government will pilot a Young Entrepreneurs Allowance in England, partly covering living costs during a business's first year. Details are thin so far, with the scheme due to roll out "shortly".

Still waiting

More than a million 18 to 24-year-olds are not in employment, education or training. The Chancellor acknowledged the scale of the problem but said solutions would follow recommendations from Alan Milburn, who is reviewing why so many young people are in that position.

Graduates with Plan 2 student loans, taken out between 2012 and 2023, also got no immediate help. Emma Reynolds, Chief Secretary to the Treasury, said afterwards that the repayment system was "under review".

For school leavers and students in Birmingham, the Budget offers some real help with wages, homes and starting out in business, with the bigger questions on jobs and student debt still to come.