Millions of people in the UK will receive a pay boost of more than £1,600, the Chancellor has announced.

Jeremy Hunt revealed he was raising the national living wage from £9.50 per hour to £10.42 per hour, an almost 10% boost.

Jeremy Hunt told the Commons: “Today, I am accepting the recommendation of the Low Pay Commission to increase it next year by 9.7%.

“That means, from April 2023, the hourly rate will be £10.42 which represents an annual pay rise worth over £1,600 to a full time worker.

“It is expected to benefit over two million of the lowest paid workers in the country and keeps us on track for our target to reach two-thirds of median earnings by 2024.

“And it is the largest cash increase in the UK’s national living wage ever.”

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Elsewhere, Mr Hunt confirmed that both pensions and benefits would rise in line with inflation, a 10.1% boost.

"That is an expensive commitment costing £11bn," Mr Hunt said, "but it means 10 million working age families will see a much-needed increase next year.

"On average, a family on Universal Credit will benefit next year by around £600. And to increase the number of households who can benefit from this decision I will also increase the benefit cap with inflation next year."

These were some of the other key announcements made by Mr Hunt in today’s autumn statement.

Some of the country’s highest earners will pay more tax as the top rate of tax threshold is lowered from £150,000 to £125,140, meaning those earning more than £150,000 will pay an extra £1,200 a year.

Mr Hunt also announced income tax personal allowance threshold would be frozen until 2028, meaning millions will end up paying more in tax.

Freezing the threshold means that tax bands will remain the same, even as wages go up. The threshold was originally frozen until 2026.

Tax as a percentage of GDP will increase by just 1% over the next five years, Mr Hunt said.

He said he would also reform allowances on unearned income, noting: “The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024.

“The annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 next year and then to £3,000 from April 2024. These changes still leave us with more generous allowances overall than countries like Germany, Ireland, France, and Canada.”