The national minimum wage will increase by 20p an hour to £6.70 from October, the government has announced.
The changes - which represents a three per cent rise - will benefit more than 1.4 million workers across the country.
Hourly wages for young workers will also rise. For apprentices it will go up by 20% - or 57p - to £3.30 an hour.
Prime Minister David Cameron said: “At the heart of our long-term economic plan for Britain is a simple idea – that those who put in, should get out; that hard work is really rewarded; that the benefits of recovery are truly national.
“That’s what today’s announcement is all about – saying to hardworking taxpayers, this is a government that is on your side. It will mean more financial security for Britain’s families; and a better future for our country.”