For those workers previously earning the minimum wage the 50p per hour pay rise will be welcomed meaning an extra £900 per year.

However a report by the Social Market Foundation thinktank warns small firms will see wage bills rise at triple the rate of bigger companies. Those with fewer than 250 employees will grow on average by 1.5%, compared to 0.6% for businesses with 250 to 4,999 staff.

Will this now mean smaller companies favouring younger employees or not being able to afford to employ staff altogether?

Also for those companies that have agreed contracts with their customers will they be able to increase their prices to take the increase into account or suffer reduced margins.

So as with most changes there are winners and losers! Let's just hope that this does not cause more harm than good for many of the SMEs that are already struggling with employment costs.