The increase will only be applicable to employees over the age of 25. The current living wage level is £6.50 an hour, rising to £6.70 next month and £7.20 in April next year.

The Resolution Foundation’s policy analyst Conor D’Arcy said: “Because of their concentration among the low paid, women will account for the majority of the winners.

“This will have a positive – though modest – effect on the gender pay gap, and will particularly help those working part-time.”

The report claims that ‘the majority’ of people in work will benefit from a ripple an increase in pay in line with the living wage hike, while some will feel the a ‘ripple’ effect boosting their earnings further after the new minimum of £7.20 an hour is introduced in April 2016 due to employers maintaining current wage gaps between different workers.

It said employees in relatively low paid areas such as the Midlands, Yorkshire and Wales will feel the most benefit.