The hourly minimum wage has increased by 20p taking the new adult salary up to £6.70 an hour.
Introduced on 1 October, the new rate has come into force ahead of the planned national living wage of £7.20 an hour for over-25s from next April.
The statutory figure for 18-20 year olds has risen by 17p to £5.30 an hour and pay for under 18s has increased by 8p to £3.87 with apprenticeship rates rising to £3.30.
According to the government, the 3% rise in the adult rate is the biggest real increase since 2006 and moves the minimum wage closer to the average wage than ever before.
A report by the Resolution Foundation found the proportion of workers earning the legal minimum is set to more than double over the next five years as a result of the national living wage.
The think-tank said women and older workers are particularly likely to be affected.
Business Secretary Sajid Javid said: “As a one-nation Government we are making sure that every part of Britain benefits from our growing economy and today more than 1.4 million of Britain’s lowest-paid workers will be getting a well-deserved pay rise.”
The additional 20p per hour for lower paid workers is welcome but as the Chancellor recognised, £6.70 per hour is not a living wage.
Employers who can afford to pay more should do so without delay. The Government must also step up enforcement and enable unions and local councils to contact HMRC to report employers who are not paying the rate.
GMB General Secretary Paul Kenny said: “The Living Wage Foundation welcomes a strong national minimum wage, and the rates that come into force today will bring a much needed and welcome pay-rise to many. However life on the minimum wage remains very difficult.”
Living Wage Foundation director Rhys Moore added: “That’s why we call upon responsible businesses to pay the UK Living Wage of £7.85 an hour and the London Living Wage of £9.15.
“These rates are calculated independently and reflect the real cost of living. The Living Wage isn’t about luxuries but enabling people to do more than simply exist.”