The new rate is a 30p increase on the previous rate of £9 an hour. The new London Living Wage is £10.75 per hour, an increase of 20p an hour.

Living Wage rates are calculated based on what people need to live on. The UK rate has increased more than the London rate due to private rental costs and childcare costs, which both grew more quickly nationally than in London.

The UK Living Wage rate is £1.09 per hour more than the government minimum wage for over 25s, while the London Living Wage is £2.54 per hour higher.

The new rates mean that more than 210,000 workers are set for a pay rise. According to the Living Wage Foundation, a full-time worker paid the £9.30 real Living Wage will receive more than £2,000 a year in additional wages compared to current government minimum – equivalent to nine months of a typical family’s food and drink bill.

In London a full time worker will receive £5,000 more per year, equivalent to the average family’s annual food, drink, gas and electric bills.

Who pays the Living Wage?

According to the Living Wage Foundation, more than £1.1bn in extra wages has gone to low paid workers because of the Living Wage movement, including £257m in the last year alone.

A record 1,500 more employers have accredited with the Living Wage Foundation this year, with major new names including Hiscox, Crystal Palace Football Club, Welsh Water, Leeds Building Society, London City Airport and Newcastle University.

These organisations join a network of almost 6,000 employers across the UK, including more than a third of the FTSE 100 companies, household names such as Aviva, Lush, Nationwide, Burberry, and Heathrow Airport, and thousands of small businesses, who are choosing to pay the real Living Wage.

The wage announcement comes as research by KPMG demonstrated the scale of in-work poverty, with 5.2 million jobs still paying less than the real Living Wage. There are big regional disparities with Northern Ireland having the highest percentage of jobs paying below the Living Wage (23 per cent) and South East England the lowest (15 per cent).

Katherine Chapman, director of the Living Wage Foundation said: “In this time of uncertainty today’s new Living Wage rates give a boost to hundreds of thousands of UK workers. Good businesses know that the real Living Wage means happier, healthier and more motivated workers, and that providing workers with financial security is not only the right thing to do, but has real business benefits.

“This year for the first time cities and towns have announced big plans to grow the number of Living Wage Employers in their communities. We are delighted at the ambition of Cardiff and Salford to build Living Wage cities, with Cardiff planning to double the number of workers getting the real Living Wage to nearly 50,000, freeing many more families from the low pay trap. We hope to see many more towns and cities follow suit.”