The national living wage for over-23s could be in line for a significant rise from April 2022, according to reports.
The Low-Pay Commission, which sets the minimum rates each year, wants to boost the pay of the lowest earners from £8.91 an hour to about £9.42.
Any announcement is likely to be confirmed in this month's Autumn Budget, which takes place on 27 October 2021.
Should the Treasury sign-off this recommendation, it will mean the annual earnings of someone on the national living wage increasing by 5.7%.
To someone working 35 hours per week, the increase would be worth an extra £928 a year before tax.
Any national living wage rise might also result in bringing more younger people into auto-enrolment workplace pension schemes.
Steve Cameron, pensions director at Aegon, said:
"Eligible employees earning over £10,000 have a total of 8% of qualifying earnings paid into their pension, made up of employer and employee contributions and tax relief.
"If the national living wage rises to £9.42, employees working for at least 20.4 hours a week will meet the minimum income threshold to be enrolled in a workplace pension."
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