Real living wage rates are rising to £9 per hour to match an increase in the cost of living.

The rates, which are higher than the government living wage and set by the Living Wage Foundation (LWF), are up from £8.75 per hour.

The move has been driven largely by higher transport costs, private rents and council tax.

Workers in London will see a rise of 35p to £10.55 per hour for their real living wage. The LWF rates are adopted voluntarily by businesses, while the government's living wage is £7.83.

Research from KPMG has revealed that one in five jobs still pay less than the real living wage – and the number failing to meet the threshold is growing.

Jenny Baskerville, director of inclusion, diversity and social equality at KPMG UK, said:  “Given that last year’s analysis revealed a glimmer of hope, it is a huge disappointment to learn that the proportion of jobs currently paying below the real living wage is once again growing. The number of jobs paying below the threshold has actually increased by 1.2 million since 2012, which really hammers home the magnitude of in-work poverty in the UK.    

“Clearly such a sizeable challenge requires a collective societal effort. For businesses, it’s critical to look beyond the bottom line, instead of focusing on non-monetary aspects like improved staff morale, rising service standards or increased productivity.”  

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LWF director Tess Lanning said:  “The living wage campaign is about tackling the rising problem of people paid less than they need to live.

“Responsible businesses know that the government minimum is not enough to live on, and today’s new living wage rates will provide a boost for hundreds of thousands of workers throughout the UK.”    

She added: “Employers that pay the real living wage enable their workers to live a life of dignity, supporting them to pay off debts and meet the pressures of rising bills. We want to see local councils, universities, football clubs, bus companies and the other major public and private sector employers in every city commit to become real living wage employers.

“When they do, thousands of people get a pay rise, but other local employers also follow their lead. If more of these institutions step up, we can start to build true living wage places."  

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