During the spending review last November, chancellor Rishi Sunak announced the 2.2% increase will likely benefit around two million people.
A full-time worker on National Living Wage (NLW) will now earn £345 more each year, however the increase is less than that recommended to the UK government by The Low Pay Commission, which proposed the NLW should rise from £8.72 to £9.21 per hour before the pandemic hit.
The Trades Union Congress (TUC) said the COVID-19 pandemic has revealed that many workers in the UK are still being underpaid and undervalued.
Recent analysis by the organisation found that two million people in the UK were paid below minimum wage in April 2020 compared with 409,000 in April 2019.
Speaking to HR magazine, TUC general secretary Frances O'Grady said it is unacceptable that so many key workers are on the minimum wage as they have worked around the clock to keep the country going through the pandemic.
She said: “But those expecting a decent pay increase today have been let down by the government’s decision to row back on the full rise they were promised.
"TUC analysis has shown that one in three key workers earn less than £10 an hour, this can make it tough for them to pay bills and put food on the table.”
O'Grady said ministers must get the minimum wage up to £10 an hour to stop millions of working people from living in poverty.
The impact of low pay on the workforce
He said: “Today’s boost is necessary but as we start to recover from the impact of the last year, too many workers are finding that minimum wage increases are being wiped out due to inadequate social security, insufficient hours available to them and high housing costs.
"The minimum wage has successfully increased pay for the lowest earners, and it is right to move towards a level at two thirds of median pay by 2024."
Hawking said despite multiple rises of the minimum wage, the share of workers in poverty has risen continuously over the last 20 years.
"The government must now build on this pay increase by delivering on the ambitions in the promised Employment Bill," he said.
“Tackling insecure work and embedding job quality in the plans for recovery are vital if the government is to deliver an economy where work can offer a reliable route out of poverty for everyone”.