The national living wage could be raised to £10.50 an hour in the next five years under plans announced by the Chancellor.

And he is to lower the age threshold for those who qualify from 25 to 21.

Sajid Javid said his "ambitious" proposal would give four million people a pay rise.

The current rate for over 25s is £8.21 - but the Living Wage Foundation says it should already be £9 across the UK and £10.55 for those in London.

Earlier this year, Labour pledged to raise the National Living Wage to £10 an hour in 2020 and to include all workers under 18 - who currently get a minimum wage of £4.35.

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Labour's shadow chancellor, John McDonnell, called Mr Javid's announcement a "pathetic attempt at catch-up".

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Mr Javid said he wanted the national living wage to be raised to match two-thirds of median earnings, which would represent a 95p hourly increase in 2024 compared to the current system.

"Over the next five years, we will make the UK one of the first major economies in the world to end low pay altogether," he said.

"To do that, I am setting a new target for the national living wage: raising it to match two-thirds of median earnings.

"That means, on current forecasts, this ambitious plan will bring the national living wage up to £10.50 - giving four million people a well-earned pay rise."

Only workers aged 25 and over are currently able to receive the national living wage, which is set at £8.21. Those 24 and under receive the minimum wage.

But Mr Javid said the Government wanted to reward the hard work of millennials and bring down the age threshold to cover all workers over the age of 21.

But business organisatoins sounded a note of caution about the potential effects of the policy.

The chief executive of the British Retail Consortium, Helen Dickinson, said there was "nothing wrong with targeting higher wages", but "all of this adds to the cumulative pressures you have seen take their toll on the retail sector".

Neil Leitch, chief executive of the Early Years Alliance, a charity which represents nurseries, said: "A rise in the national living wage is fantastic for younger workers, but for the early years sector, this could be an additional cost that many providers will not be able to afford to bear."

The TUC, meanwhile, said the chancellor's promise "should be taken with a huge bucket of salt".

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People aged 23 and over will get the national living wage from 2021, while those aged 21 and over will get it within five years.

Shadow chancellor John McDonnell, commenting on the living wage plans, said: "This pathetic attempt at catch-up by the Conservatives will fool nobody.

"Labour will introduce £10 as a minimum as soon as we take office and, rising with living costs, it will mean everybody over 16 years of age will be earning comfortably more than £10.50 an hour by 2024."