Wage rise for low-paid workers
More than 30,000 low-paid workers are in line for a pay rise of up to £400 a year after an increase in the living wage, taking it well above the national minimum rate.
The voluntary rate will increase by 25p an hour in London to £8.80, and by 20p an hour to £7.65 outside the capital.
Unions, campaigners and politicians welcomed the announcement, which sets the living wage at almost £2.50 an hour above the statutory legal minimum wage, which stands at £6.31 an hour for over-21s and £5.03 for workers aged between 18 and 20.
A total of 432 employers are now signed up to the living wage campaign, up from 78 this time last year, including Legal & General, KPMG, Barclays, Oxfam, Pearson, the National Portrait Gallery, First Transpennine Express, as well as many smaller businesses, charities and town halls.
Together they employ more than 250,000 workers and also commit to roll out the living wage in their supply chain.
The living wage is independently set each year, according to the basic cost of living in the UK. It is updated annually and employers choose to pay the rate voluntarily.
Campaigners are urging firms to pay the living wage rate to help workers cope with rising household bills such as soaring energy costs.
Rhys Moore, director of the Living Wage Foundation, said: "The living wage has become a must-have badge of honour for employers. By looking out for the living wage badge, you can now choose to support businesses that are doing the right thing. It works just like Fairtrade and will grow even faster with consumer support."
Labour Party leader Ed Miliband, who has pledged to offer tax breaks to firms paying the living wage, said: "Hundreds of businesses, charities, Labour councils across Britain, and the Citizens UK living wage campaign are already showing how we can make work pay.
"A One Nation Labour government will work with employers in both the public and private sector to tackle low wages.
"Together we can help lift more people out of poverty with decent pay, raise productivity, and control spending on welfare."
The new London figure was announced by Mayor Boris Johnson during an event at Great Ormond Street Hospital, one of the latest organisations to sign up to the campaign.
The Mayor said he backed the living wage because it was "pure economic common sense", adding: "I don't think it will succeed if it is compulsory - but this is growing every year. It is the right thing for our city and our people.
"Paying the London Living Wage ensures hard working Londoners are helped to make ends meet, providing a boost not only for their personal quality of life but delivering indisputable economic dividends to employers too.
"This in turn is good for London's productivity and growth. It is extremely heartening to see major new companies signed up this year but we need more converts. I hope we can spur on even more organisations to do the right thing."
Mr Johnson said he will press more businesses to support the campaign.
TUC general secretary Frances O'Grady said: "The rise in the living wage will mean a big income boost to thousands of low-paid workers across the UK.
"But many more low-paid workers should receive the living wage. Many large employers, in particular, can afford to pay a living wage, but are choosing to sit idly on rising cash piles rather than use their resources productively through better pay rises."
Unison union general secretary Dave Prentis said: "We need good employers to speak up for the advantages of paying a living wage.
"Public sector employers should be leading the way, setting an example, but sadly there is still a long way to go."
Asked whether David Cameron thought companies should pay the living wage, the Prime Minister's official spokesman said: "His view is that he supports those businesses that choose to pay the living wage, where they can afford to do so.
"The point is around employers taking decisions that are right for them. Where employers can afford to pay it, the Government supports that decision.
"In terms of policy, we have the minimum wage and one of the things the Government is doing is it has asked the Low Pay Commission to look at further increases in the national minimum wage."