Millions will get a pay rise next year when the National Living Wage is increased from £8.91 an hour to £9.50.
The Treasury confirmed the move for all over-23s on Monday ahead of Chancellor Rishi Sunak’s Budget this week.
The 59p hourly boost will mean a full-time worker on the living wage will get a pay rise of more than £1,000 per year.
The 6.6% hike is more than twice the current consumer price inflation rate of 3.1%.
While the National Minimum Wage applies to everyone of school-leaving age, the National Living Wage applies to everyone aged 23 and over.
For those aged 21 and 22, the minimum wage will rise from £8.36 an hour to £9.18, while the figure for apprentices will go from £4.30 to £4.81 per hour.
Mr Sunak said: “This is a Government that is on the side of working people.
“This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament.”
But there will be questions over whether the hike is enough to support families facing a cost of living crisis.
Shadow chief secretary to the Treasury Bridget Phillipson said the rise was an “underwhelming offer”.
“Much of it will be swallowed up by the Government’s tax rises, Universal Credit cuts and failure to get a grip on energy bills,” the Labour MP said.
“It’s clear that Labour is the only party serious about improving the prospects of working people.”