Chancellor Rachel Reeves said she had accepted recommendations from the Low Pay Commission so that those on low incomes are “properly rewarded” for their work.

From next April the National Living Wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over, which the Government said will increase gross annual earnings of a full-time worker on the rate by £900, benefiting around 2.4 million low-paid workers.