The Real Living Wage is set to rise by 5% giving almost half a million workers a pay rise to £12.60 an hour, the Living Wage Foundation has announced.

In London, the Living Wage will increase to £13.85 as over 15,000 employers across the UK follow the increase.

The Real Living Wage is different to the government’s minimum wage rate, which for those over the age of 21 is called the National Living Wage (NLW) and is currently £11.44 an hour. It is a higher, voluntary rate that is independently calculated based solely on the actual cost of living.

A full-time worker earning the Real Living Wage would earn £2,262 a year more than a worker earning the current NLW and £1,170 more than their current pay.

Katherine Chapman, Living Wage Foundation Director, said: ‘Low paid workers have been hardest hit by the cost-of-living crisis and are still struggling to stay afloat amidst persistently high prices.

‘The Real Living Wage remains the only UK wage rate calculated based on actual living costs, and the new rates . . . will make a massive difference to almost half a million workers who will see their pay increase.

‘It's a challenging time for businesses too, which is why it is so encouraging to see the Living Wage movement continue to grow at pace.’