The national minimum wage rate for employees aged 21-24 years old will increase from £6.70 to £6.95 an hour.
The 25p increase will come into effect in October 2016.
The national minimum wage rate for those aged 18-20 will rise by almost 5% from £5.30 to £5.55 an hour, and the rate for under 18s will increase from £3.87 to £4 an hour.
From October, the minimum wage for apprentices will rise by 10p to £3.40 an hour.
The government’s national living wage will come into force from April 2016, and will be compulsory for employees aged 25 and over. The statutory rate will be introduced at £7.20 an hour, with plans to increase this to £9 by 2020.
Chancellor George Osborne said: “Alongside our new national living wage, we’re also boosting pay for young workers with increases in the national minimum wage, the next step for the next generation as we move to a higher wage society.”
Nick Soret, head of consultancy support at NatWest Mentor, added: “While these national minimum wage increases will be welcomed by younger workers who will miss out on the introduction of the national living wage for over-25s from April, they will increase costs further for their employers and run well ahead of pay rises generally. Employers need to build these additional costs into their business planning”.