Asda has said it will invest £150 million into giving more than 120,000 staff an 8.4 percent pay rise.

The UK’s third largest supermarket chain has said it will increase basic pay for retail workers to £12.04 later this year.

It is the latest supermarket group to hike pay rates ahead of an increase in the national minimum wage in April.

Mohsin Issa, Asda co-owner, said: “This record investment will see Asda become the highest-paying grocery retailer in the UK, recognising the hard work of our store colleagues in serving customers every day.

“We want to be a company that people are proud to work for, which is why we are proposing increasing pay for retail and Express colleagues by more than eight percent this year.”

The national living wage will increase by £1.02 an hour from April while the national minimum wage rates for younger workers will also increase to £8.60 per hour, the Treasury announced the day before its Autumn Statement of 2023.

Chancellor Jeremy Hunt said at the time: “Next April all full-time workers on the national living wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.

“The national living wage has helped halve the number of people on low pay since 2010, making sure work always pays.”

The move brings the national living wage rise from £10.42 to £11.44 per hour, marking an almost 10 percent increase – the most significant in over a decade.

Eligibility for the national living wage was also extended by reducing the age threshold to 21-year-olds for the first time.

This means a 21-year-old will get a 12.4 percent increase from £10.18 this year to £11.44 next year, worth almost £2,300 a year for a full-time worker.

National minimum wage rates will also increase in April. 18-20-year-olds will get a wage boost to £8.60 per hour – a £1.11 hourly pay bump.