Chancellor Jeremy Hunt has confirmed that the National Living Wage will rise to at least £11 an hour next year.
The increase means a pay rise of £1,000 a year for over 23s on the lowest wages.
The National Living Wage is currently £10.42 per hour, while the National Minimum Wage is an hourly rate of £5.28 for under 18s and £7.49 for 18 to 20-year-olds and £10.18 for 21 to 22-year-olds.
The National Minimum Wage applies to those who are of at least school-leaving age, but who are not yet 23 years old.
WATCH NOW: Jeremy Hunt speaks to GB News from Tory Party Conference
In a speech at the Conservative Party Conference today, Mr Hunt said that whatever the Low Pay Commission’s recommendation for the National Living Wage next year is, the Government “will increase it next year to at least £11 an hour”.
He added: “That is a pay rise for over two million workers.”
While an increase is welcomed by the campaigning organisation Living Wage Foundation, its director Katherine Chapman, said it falls short of the “real Living Wage” – a voluntary rate which is based on the cost of living.
Ms Chapman said: “A rise in the statutory National Living Wage from next April is welcome news for low paid workers, but may fall short of the real Living Wage next year, the only rate that is independently calculated based on the cost of living.
"The new real Living Wage rates will be announced later this month on October 24, where we expect a significant increase.”
The real Living Wage is calculated annually by the Resolution Foundation and overseen by the Living Wage Commission.
Nearly 14,000 employers pay the real Living Wage to more than 400,000 employees.
The hourly UK Living Wage is currently £10.90, and £11.95 in London.
Once the new Living Wage rates for 2023-24 are announced, employers will have six months to implement the new rates.
Elsewhere in his speech, the Chancellor also pledged to "look again" at benefit sanctions, which could make it harder for some people to get support from the state.
The Chancellor will deliver his 2023 Autumn Statement in the House of Commons next month, on November 22.