The National Living Wage rises by 2.2% to £8.91, the equivalent of more than £345 a year for a full-time employee, and will be given to 23 and 24-year-olds for the first time.

These changes follow recommendations made to the Government by the Low Pay Commission (LPC) and are a first step towards the target of the NLW reaching two-thirds of median earnings for workers aged 21 and over by 2024.

The Living Wage Foundation said workers paid the voluntary so-called Real Living Wage will receive £1,150 more over the coming year, and £3,800 in London, compared with those on the statutory rate.

Ministers said the increase means a full-time worker on the National Living Wage will be taking home £5,400 more annually than they were in 2010, and it will particularly benefit workers in sectors such as retail, hospitality, and cleaning and maintenance.

The increases are £8.72 to £8.91 an hour for workers over the age of 23; from £8.20 to £8.36 for those aged 21-22; from £6.45 to £6.56 for 18 to 20-year-olds; from £4.55 to £4.62 for under-18s; and £4.15 to £4.30 for apprentices.

Prime Minister Boris Johnson said: “The National Minimum and Living Wages have increased every year since they were introduced, supporting the lowest paid, and despite the challenges we’ve faced recently, this year will be no different.

“That’s why we’re providing a well-earned pay rise to two million people, which will be a welcome boost to families right across the UK. To make sure the next generation isn’t left behind, everyone over 23 years old will also now be eligible.”

Chancellor Rishi Sunak added: “We know that the past year has been very difficult for businesses and families across the country. This pay rise will help support employees as we steadily reopen the economy and get more people back to work.”