The 20p-an-hour increase in London and 40p rise elsewhere means more than 300,000 workers employed by Living Wage employers will earn more from today.

Unlike the Government’s National Living Wage (£8.91 an hour for over 23s), the Real Living Wage is calculated based on living costs including fuel, energy, rent and food.

A full-time worker earning the new Real Living Wage would earn £1,930 a year more than a worker earning the current National Living Wage.

The Living Wage Foundation says that’s the equivalent of seven months of food bills, and more than five months’ rent based on average household spending in the UK. Even on next April’s higher National Living Wage rate of £9.50, a full-time worker on the Real Living Wage would earn £780 more.

In London, a full-time worker on the new Real Living Wage rate would earn an additional £4,173 a year compared to a worker on the current National Living Wage, and £3,022 more than a worker on next year’s National Living Wage.

The announcement of the new rates comes as research by the Living Wage Foundation demonstrated the scale of low pay during the pandemic, with 4.8 million jobs (17.1% of employee jobs) still paying less than the Real Living Wage.

Northern Ireland had the highest proportion of jobs paying below the Living Wage (21.3% or 236,000) and the South East the lowest (12.8% or 533,000).

Katherine Chapman, director at the Living Wage Foundation, said: “With living costs rising so rapidly, today’s new Living Wage rates will provide hundreds of thousands of workers and their families with greater security and stability.

“For the past 20 years the Living Wage movement has shaped the debate on low pay, showing what is possible when responsible employers step up and provide a wage that delivers dignity. Despite this, there are still millions trapped in working poverty, struggling to keep their heads above water – and these are people working in jobs that kept society going during the pandemic like social care workers and cleaners. We know that the Living Wage is good for businesses as well as workers, and as we rebuild our economy post pandemic, the real Living Wage must be at its heart.”