Government analysis predicts the National Living Wage will eradicate the pay gap between the lowest paid men and women by 2020.

The National Living Wage, introduced today, will ensure all workers aged 25 and over are paid a minimum of £7.20 an hour. The Government said it would mean a pay rise for 900,000 women and half a million men.

Analysis by the Treasury found the gender pay gap for those on the lowest wages will fall from 5.6% to zero by the end of the decade.

'Over the next five years women earning the National Living Wage will see their pay rise by over a quarter and growing more than 1.5 times faster than the salary of an average worker,’ it said.

Chancellor George Osborne said the introduction of the National Living Wage would play ‘a central role in moving Britain to a higher wage, lower tax, lower welfare economy’ and ‘mark the end of the gender pay gap for some of our lowest paid and hardest working people’.

But the care industry has once again warned the National Living Wage will have dire consequences for providers unless funding issues are addressed.

Professor Martin Green, chief executive of Care England said: ‘We have warned and warned about social care underfunding and consequent provider failure, but central government has taken little responsibility for the attrition of the care sector.

‘For some, services have already been lost, for others, the National Living Wage will be the final straw. The introduction of the National Living Wage presents an additional, unfunded, statutory cost threatening the sustainability of the social care market, heaping pressures onto care providers and ultimately residents and the NHS.’