National Living Wage to rise to £9.50 an hour

It is one of the largest increases seen for the living wage, with the rise worth £1,074 extra a year before tax for a full-time worker.

The move follows the recommendation of independent advisers, the Low Pay Commission.

There will also be rises in the minimum wage for workers aged 21 and 22 years old, from £8.36 to £9.18 – a 9.8% increase. The rate for 18 to 20-year olds will rise from £6.56 to £6.83 and for 16- and 17-year olds it will rise from £4.62 to £4.81 – up 4.1%.

While the hourly rate for apprentices will increase by 11.9% to £4.81.

Chancellor Rishi Sunak said the rise 'ensures we're making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament'.

“This is a government that is on the side of working people,” he said.

Kate Nicholls, chief executive, UKHospitality, said the hospitality sector was already committed to good and fair pay for its staff.

“As a result, wages in the sector are already increasing steadily – approximately 20% over the last five years, with further growth since post-Covid reopening.

“This is against a backdrop of massive post-pandemic challenges for businesses in the sector, many of which have had to take on huge debts in order to survive and now face soaring inflation costs of 13%.

"Further support is therefore vital if the sector is to be able invest in its people, drive job creation and contribute to wide economic recovery.”

Nicholls said the most powerful measures the government could now take to further support the sector include immediate root and branch reform of business rates and to permanently maintain the current 12.5% rate of VAT.