London Living Wage workers receive 5.3% pay rise

About 3,500 employers in the capital are signed up to the London Living Wage scheme

More than 140,000 Londoners will receive a 5.3% pay rise as the London Living Wage is increased to £13.85 an hour.

The special wage, created by the charity Living Wage Foundation, is based on independent calculations of what people need to afford their cost of living.

About 3,500 employers in the capital are signed up to the voluntary scheme.

Katherine Chapman, director of the Living Wage Foundation, said the new rate - which has increased by 70p from £13.15 - would "make a massive difference to workers".

Across the rest of the UK, the Real Living Wage rate rose by 5% to £12.60.

This is separate to the government's National Living Wage.

By law employers must pay the minimum wage set by the government to those aged 21 and older, currently set at £11.44 per hour.

A full-time worker on the London Living Wage will now earn £4,700 extra across the year compared with someone on the National Living Wage.

The announcement follows research by the foundation which highlighted almost 600,000 low-paid workers in London continue to feel the impact of high living costs.

In a recent survey, it also found more than half of Londoners earning below the London Living Wage have used a food bank in the last 12 months.

'Happy team'

The Bird & Blend Tea Co, The Oval Cricket Ground, Shakespeare’s Globe and West Ham FC are just some of the employers in the capital that are signed up to the London Living Wage.

Mike Turner, co-founder of Bird & Blend Tea Co, which has three shops across London, said: "Introducing the living wage has not only reduced our turnover but improved recruitment too.

"The blend of treating people fairly and doing business in the right way is our recipe for a successful company and a happy team."

Muniya Barua, of campaign group BusinessLDN, said: "This above inflation increase in the London Living Wage will prove challenging for firms at a time when they are facing significant cost pressures."

However she added there were clear business benefits.

"Not only does it help the lowest paid in society but it also boosts retention and recruitment of talent," she said.

The Mayor of London, Sadiq Khan, said: "By raising the salaries of the lowest paid workers in the capital, we can build a better and more prosperous city for all Londoners."

More than £1.4bn in additional wages have gone to low-paid employees in London since 2011.

What is the London Living Wage?

• A special wage, created by the charity Living Wage Foundation

• It is based on independent calculations of what people need to afford their cost of living and applies to all workers over 18

• It reflects the higher cost of living in the capital

• It is different from the government's National Living Wage, which is the legal minimum employers must pay for over-21s