The Department of Trade and Industry has also accepted the recommendation of the Low Pay Commission that the minimum pay for workers aged 16 and 17 should increase from£3.00 to£3.30 an hour.
Trade and Industry Secretary Alan Johnson said: 'It's at a right time when our economy is generally strong, with the longest ever period of sustained growth and nearly 2.4 million more jobs than 1997, that we continue to help those who get paid the least.'
About 1.3 million workers will be affected by the increase. However, the British Retail Consortium slammed the increase, saying it would cost jobs. 'Above-inflation wage increases could lead to about 35,000 jobs being lost,' said BRC director-general Kevin Hawkins.
In the same announcement, the Government accepted that salary sacrifice schemes, such as childcare vouchers, should not count towards the minimum wage. Enforcement will also be stepped up in sectors that employ migrant workers.
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