The minimum wage is to increase by 17p an hour to £5.52, the Government has announced.
The new rate for adults will come into force in October and will lead to pay rises for more than one million workers, two-thirds of them low-paid women.
Trade and Industry Secretary Alistair Darling said the statutory rates for 18-21-year-olds will rise by 15p to £4.60 an hour while 16 and 17-year-olds will have their rate increased by 10p to £3.40.
Mr Darling said he had accepted recommendations from the Low Pay Commission for the new rates.
But he rejected a recommendation that 21-year-olds should receive the adult rate.
Mr Darling said the minimum wage had now gone up by almost 30% more than inflation since 1999.
"Just 10 years ago home workers could be paid as little as 35p an hour, cleaners £1.30 an hour and security guards £2.25 an hour, which was bad for families and just plain wrong.
"I am proud of the minimum wage, proud of how it is helping families and proud of the role it plays in the modern economy we are delivering."
The Government also announced that industries which employ a large group of migrant workers will be targeted to make sure they are being paid the proper rate.
Since 1999 more than £22 million in unpaid wages has been recovered on behalf of tens of thousands of workers paid below the minimum wage. The Government has already targeted hairdressing and childcare sectors for enforcement and said it will turn its attention to hotels and hospitality.
