The national living wage (NLW) is set to increase to at least £11 an hour from next April, Chancellor Jeremy Hunt has confirmed.
In a Conservative Party Conference speech, Hunt said the move would benefit two million of the lowest-paid workers.
Based on the Low Pay Commission's latest forecasts, a full-time worker on the NLW would earn over £1,000 more next year if the wage increases to over £11 an hour.
The NLW, currently set at £10.42 an hour, is the lowest amount workers aged 23 and over can be paid per hour by law. There are lower rates for younger workers.
Following successive rises since the NLW's introduction in July 2015, the announcement means a full-time worker on the living wage will be over £9,000 better off than they would have been in 2010.
Alongside the living wage announcement, Hunt also said ministers would look again to enforce the requirements to look for work that apply to certain benefits.
Hunt said:
"Since we introduced the living wage, nearly two million people have been lifted from absolute poverty after housing costs - not by tax credits or benefits, but by removing the barriers to work: boosting salaries, cutting tax, making work pay."
Talk to us about how these changes affect your business.