The minimum wage is to rise by four times the rate of inflation from April for those aged over 21.
The increase means people over 25 will be paid £8.72 an hour from April and those between 21 and 24 will be paid £8.20 an hour.
For those aged 18 to 20 the hourly rate will increase by 4.9% to £6.45; for under-18s it will go up 4.6% to £4.55; and for apprentices it will rise by 6.4% to £4.15.
Businesses, particularly small businesses, have warned that the rises might lead to a slowdown in recruitment and cutting costs elsewhere and have called for other help from Government to offset the impact.
However, the TUC says the minimum wage should be at least £10 an hour. Others warned about problems with enforcing the minimum wage following a rise in reports of non-compliance. A report published in January by the Resolution Foundation says that in 2016 one in five workers was being underpaid and that this figure is now one in four. Researchers at the think-tank pointed out that, although HMRC can levy penalties worth up to 200% of wage arrears for non-compliance, the average in 2017-18 was about 90% – which it says is not enough to serve as a deterrent. Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “As the government plans to increase the legal wage floor it is essential to strengthen the incentives for firms to comply. The government can act by encouraging HMRC to take a tougher line with minimum wage offenders and giving it the power to levy larger financial penalties.”