Around 1.8 million workers will receive an almost 5% pay rise as the national living wage increases today.
The hourly rate for adults aged 25 and older has risen from £7.83 to £8.21, which works out as an extra £690 a year.
It marks the biggest the ever increase at 4.9%, according to the government.
The hourly rate for 21 to 24-year-olds has increased from £7.38 to £7.70, and from £5.90 to £6.15 for 18 to 20-year-olds.
The government says workers in the retail and hospitality industries will benefit most.
Advertisement
A study by the Trade Union Congress (TUC) has suggested young workers are missing out because of the lower rates for their age group.
The average 21 to 24-year-old minimum wage worker is earning £800 a year less than over-25s, the research indicated.
More from UK
The TUC has called for all over-21s to be paid the full minimum wage rate and for it to be raised to £10 an hour as soon as possible.
Monday's pay rise comes on the 20th anniversary of the launch of Labour's national minimum wage policy.
The Labour government accepted the Low Pay Commission's recommended rate of £3.60 an hour in 1998, with figure becoming the minimum wage for over 22-year-olds in 1999.
Those aged between 18 and 21 were given a national minimum wage of £3.00.
The policy was highly controversial in the run-up to its adoption, and was opposed by the Conservative party and many economists.
It was feared a national minimum wage would lead to job losses and reduce economic competitiveness.
The assumption was based on the idea that employers would cut jobs if they had to pay their staff more.
However, in the years that followed it was found to have no significant effect on employment or productivity in most sectors.
The Conservatives reversed their policy of abolishing the national minimum wage in February 2000.
The Low Pay Commission wrote of the national minimum wage in February 2003: "It has ceased to be a source of controversy and become an accepted part of our working life."
A minimum wage for 16 – 17 year-olds was introduced in 2003 and was set at a rate of £3.00 a hour.
Ten years after its introduction, the national minimum wage for over 22-year-olds had reached £5.80, while for 18 to 21-year-olds it was £4.83.
George Osbourne announced a further rate known as the national living wage would apply to those aged 25 or over from 1 April 2016.
It was set at a rate of £7.20 an hour.
Despite a steady rise in the minimum wage, many argue that wage increases have not kept up with the cost of living.
The Living Wage Foundation states that the government's calculation is based on reaching a figure that represents 60% of average earnings bRead More – Source
[contf]
[contfnew]
Sky News
[contfnewc]
[contfnewc]
