Minimum wage to rise 3%

Here's what's happening:

• The new rate for adults aged 21 and above will rise by 20p to £6.70/hour, up from £6.50/hour – a 3% increase.

• The new rate for 18 to 20–year–olds will rise by 17p to £5.30/hour, up from £5.13/hour – a 3% increase.

• The new rate for under–18s will rise by 8p to £3.87, up from £3.79 – a 2% increase.

• The new apprenticeship rate will rise by 57p to £3.30, up from £2.73 – a 20% increase.

The new rates come into force ahead of the planned so-called national living wage - the Government calls the minimum wage for over 23’s the ‘national living wage’. We don’t use that term, as it is not based on assessment of the cost of living - of £7.20 an hour for over 25-year-olds from next April (see MoneySavingExpert.com's New national living wage to be introduced news story for more on this).

Business Secretary Sajid Javid says: "As a one-nation Government we are making sure that every part of Britain benefits from our growing economy and today more than 1.4 million of Britain's lowest-paid workers will be getting a well-deserved pay rise."

But TUC general secretary Frances O'Grady says: "Today's increase in the national minimum wage is welcome but hardly cause for euphoria.

"It is hard to celebrate when many low-income families will see this and future gains wiped out by the Chancellor's cuts to tax credits. And when under-25s will be excluded from the new supplement that comes in next April."

Additional reporting from Helen Knapman.