Budget 2018: National minimum wage to rise next April

The 38p increase represents a 4.9% rise, meaning the UK's lowest paid workers will see their pay rise above current levels of inflation. It amounts to an annual increase of about £690 for a full-time worker.

The Government says by 2020 it wants the national minimum wage to be 60% of 'median earnings' (that's an average which is the middle amount of what workers earn - ie, half of workers earn less than it and half more). 

What is the national 'living' wage?

Introduced in July 2015 by the then Chancellor George Osborne, the compulsory national 'living' wage is the lowest wage which can legally be paid to employees aged 25 or over. It is not based on an assessment of the cost of living, however, and is in fact the minimum wage for over 25s. It is adjusted every April.

It's higher than the rates set for employees aged under 25 (as the table below illustrates) and is also rising.

However, the campaign group Living Wage Foundation believes employees currently need to earn at least £8.75/hour (£10.20/hour in London) to live and support their families. 

When the national 'living' wage was first announced, MoneySavingExpert.com founder Martin Lewis said: "This is not a living wage. [George Osborne] has naughtily nicked the name from the Living Wage Foundation... By using the valued brand of 'the living wage', even though he's not paying that amount, he hopes to get extra credibility."