1.6 million workers will see £102 extra drop into bank accounts

Around 1.6 million workers have been told they will be getting a pay rise early next year. The minimum wage is set to increase by 6% from April.

It will rise from the current rate of £11.44 an hour to £12.12. It will be worth £25.50 a week extra or roughly £102 a month, delivering a boost to some of the worst-off households.

The amount is given to the lowest paid workers in the UK, and is known as the National Living Wage. The pay rise is expected to be announced at Wednesday's Budget.

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Paul Nowak, general secretary of the TUC, told the Guardian: “At a time when the cost of living is still very high the lowest paid would really benefit from a decent increase in the minimum wage. We know that low-paid workers spend more of their cash in their local economies. So any increase in their spending power will benefit local firms too.”

He added: “Every time the minimum wage goes up there are some voices who predict this will drive up unemployment. Every time they are wrong.”

The minimum wage will go up at the same time as the state pension and benefits. Pensioners are set for a 4% uplift under the terms of the triple lock guarantee. This ensures the rate increases in line with whatever is highest out of inflation, wage growth and 2.5%.