The national minimum wage will increase by 20p an hour to £6.70, the government has announced.
The new rates will be implemented in October 2015.
It is the first time in six years that the rise will be higher than inflation.
The rate for those aged 16 and 17 will rise by 8p to £3.87.
Apprentices will earn an extra 7p an hour, taking their wages to at least £2.80.