The Low Pay Commission (LPC) calculates that this 2.5% increase in the adult minimum wage should benefit the public finances by £230 million as tax and national insurance rates increase and the benefits bill falls. This is important at a time when the public finances are being cut, says the TUC.
TUC general secretary Brendan Barber said: "This rise will put extra cash in the pockets of the UK's lowest-paid workers when they can ill afford to have their pay squeezed by inflation. Cuts in public services and benefits are hitting the working poor the hardest and this increase is not enough to protect them from falling living standards.
"The minimum wage has already helped hundreds of thousands of families without causing significant job losses and its success has shown that - despite much scare-mongering from some employers - sensible labour market regulation is good for business.
"If we are to win the fight against poverty pay, protect young people against exploitation and help stimulate demand in the economy the LPC must be bolder next year."