The Government has accepted the Low Pay Commission's call to increase the adult rate of the minimum wage from £5.05 to £5.35 an hour from October.
Young workers, aged 18 to 21, will see their pay increase from £4.25 to £4.45 after this time, and around 1.3 million employees will be better off.
Alan Johnson, Trade and Industry secretary, said: "It's right that at a time when our economy is generally strong with the longest ever period of sustained growth, we continue to help those who get paid the least."
The Government has also said it will review apprenticeship exemptions in 2008, and consider stepping up enforcement of the law in sectors such as hospitality, which rely on migrant workers.
Go to www.lowpay.gov.uk for a copy of the Low Pay Commission's report.
By Chris Druce
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