A minimum wage rise of 92p an hour has been confirmed by Chancellor Jeremy Hunt in his Autumn Statement this morning.
It means the National Living Wage, which is currently set at £9.50 an hour for people aged over 23, will be bumped up to £10.42 from April 2023.
Around two million workers tackling the ongoing cost of living crisis will benefit from the rise.
But the 9.7% rise is slightly below the rate of inflation, which is currently at a 41-year high of 11.1%.
The minimum wage for people aged 21 to 22 will rise from £9.18 to £10.18, from £6.83 to £7.49 for those aged 18 to 20, and from £4.81 to £5.28 for under 18s and apprentices.
Figures released earlier this week show that the UK has already suffered a 2.7% real-terms pay cut in the last year as inflation has reached record high levels.
Although this figure was slightly less than last years fall, it is “among the largest” falls since records began in 2001.
The Office for National Statistics said pay grew by just 2.2% in the public sector.
Reacting to the figures at the time, the Chancellor said: “I appreciate that people’s hard-earned money isn’t going as far as it should.
“Putin’s illegal war has driven up inflation - a hidden and insidious tax that is eating into paychecks and savings.
“Tackling inflation is my absolute priority and that guides the difficult decisions on tax and spending we will make on Thursday.
“Restoring stability and getting debt falling is our only option to reduce inflation and limit interest rate rises.”
But Lib Dem Treasury spokesperson Sarah Olney said: "This Government's economic mismanagement is leaving pay packets stretched further than ever before just as bills spiral out of control.”
Shadow Chancellor Rachel Reeves added: "Today's figures press home the knock-on impact of 12 years of Tory economic mistakes and low growth.
"Real wages have fallen again, thousands of over 50s have left the labour market and a record number of people are out of work because they’re stuck on NHS waiting lists or they’re not getting proper employment support.”
