Minimum wage up to £6.50 an hour
A million workers will receive their first real-terms rise for six years The national minimum wage will increase by 19p an hour to £6.50, the government has announced.
The new rates will be implemented in October and will benefit a million workers.
Business Secretary Vince Cable said he had accepted a recommendation from the Low Pay Commission that the minimum wage should increase by 3%.
It is the first time in six years that the rise will be higher than inflation.
The consumer prices index (CPI) rate of inflation is currently 1.9%.
The rate for 18 to 20-year-olds will go up by 10p to £5.13 an hour, a 2% increase.
The rate for those aged 16 and 17 will rise by 7p to £3.79, also a 2% rise.
Apprentices will earn an extra 5p an hour, taking their wages to at least £2.73.
Living Wage"The recommendations I have accepted today mean that low-paid workers will enjoy the biggest cash increase in their take-home pay since 2008," said Mr Cable.
He also suggested that all companies should consider helping their staff to share in the fruits of an improving economy.
"I urge businesses to consider how all their staff - not just those on the minimum wage - can enjoy the benefits of recovery," he said.
But the rise means the national minimum wage is still significantly lower than the living wage, advocated by many people as a practical minimum.
In London, the living wage is £8.80 an hour, while in the rest of the country, it is £7.65.
"Across the country, people are struggling to make ends meet," said Dave Prentice, the head of the Unison trade union.
"The sooner we move to a living wage, the better," he said.
'Timid'In January this year, Chancellor George Osborne said he backed the idea of the national minimum wage reaching £7 an hour by October 2015.
The latest announcement could pave the way for that to happen, but it would need a rise of more than 7% next year to do so.
Unite, the country's biggest trade union, said the rise announced was "timid".
"To make matters even worse, George Osborne cruelly held out hope that the rate would rise to £7," said Len McCluskey, Unite's general secretary.
"The government claims it is on the side of working people but companies are sitting on a cash mountain of £500bn and they should be forced to share more of it with the lowest paid," he added.
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