LONDON (AFP) - Britain on Tuesday announced a three per cent rise in the minimum wage, the largest real terms increase since 2008, although critics said it was still not enough.

More than 1.4 million people will benefit when the change comes into effect in October, raising the hourly minimum for workers over 21 by 20 pence to £6.70 (S$14).

The announcement, which comes on the eve of the government's final budget before May's general election, is in line with recommendations made by the independent Low Pay Commission last month.

The government also raised the minimum wage for apprentices by 20 per cent to £3.30 an hour, significantly higher than the £2.80 recommended by the commission.

"At the heart of our long-term economic plan for Britain is a simple idea - that those who put in, should get out; that hard work is really rewarded; that the benefits of recovery are truly national," Prime Minister David Cameron said.

But the opposition Labour party, which has warned that the recovery has not resulted in a rise in living standards, said the increase fell short of the £7 minimum wage promised by the government more than a year ago.

"Ministers have misled working families who have been left worse off... we need a recovery for working people," said Labour business spokesman Chuka Umunna.

The International Labour Organization warned in December that real wages in Britain in 2013 fell below levels seen in 2007, at the start of the global financial crisis.