The National Minimum Wage will rise by 3% to £6.50 an hour, the government has confirmed.

Business secretary Vince Cable today said he accepted the Low Pay Commission’s recommendation for a 3% rise.

The rate for 18 to 20-year-olds will rise by 2% to £5.13 an hour, while the rate for those aged 16 and 17 will rise by 2% to £3.79.

“The recommendations I have accepted today mean that low-paid workers will enjoy the biggest cash increase in their take home pay since 2008,” said Cable.

But Association of Convenience Stores chief executive James Lowman said: “We are disappointed with the increase in the National Minimum Wage above inflation, above average earnings growth, and above public sector pay award levels.

”Our research has clearly shown that retailers have little choice but to reduce staff hours and delay further business investment when the minimum wage is increased.”

An Association of Convenience Stores survey on the minimum wage in 2013 showed that 87% of retailers had reduced staff hours as a result of increases in employment costs, while 75% had delayed expansion and investment.

The new minimum wage rates will come into effect in October.