Minimum wage workers are set to see a wage increase of more than £1,000 per year by next year as part of Rishi Sunak’s 2021 Budget.

Millions will get a pay rise next year when the National Living Wage is increased from £8.91 an hour to £9.50.

The Treasury confirmed the move for all over-23s on Monday ahead of Chancellor Rishi Sunak’s Budget this week.

The 6.6% hike is more than twice the current consumer price inflation rate of 3.1%.

What is the difference between National Minimum Wage and National Living Wage?

While the National Minimum Wage applies to everyone of school-leaving age, the National Living Wage applies to everyone aged 23 and over.

Those under the age of 18 are paid a minimum of £4.62 per hour rising to £6.56 for those aged 18-20.

Workers aged 21-22 are paid £8.36 and when workers reach the age of 23 they are paid the National Living Wage which is currently £8.91 per hour.

What did Rishi Sunak say about the rise in wages?

Mr Sunak said: “This is a Government that is on the side of working people.

“This wage boost 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.”

Budget announcement date 2021

The Chancellor will announce the givernment's spending plan for 2021 on Wednesday, October 27.

Mr Sunak will address the Commons following his previous Budget announcement in March following a delay due to the coronavirus pandemic.