Employers signed up to the living wage pledge upped the voluntary rate by 30p an hour to £8.75, while London rate is raised by 45p to £10.20.
At least 150,000 workers across the UK are set to get a pay rise as employers signed up to the living wage pledge upped the voluntary rate by 30p an hour to £8.75.
Campaigning group Living Wage Foundation said the living wage for those living in London had been raised by 45p an hour to £10.20.
More than 3,600 employers across the UK have signed up to the living wage rate, including more than 1,000 in London alone.
The group said the increase in the living wage was driven by higher inflation feeding through to the basket of goods and services that underpin the rates, with rising rents and transport costs also having an impact.
It also announced that Heathrow Airport had signed up to the living wage, ensuring that 3,200 airport workers are paid the living wage by the end of 2020.
"The new living wage rates announced today will bring relief for thousands of UK workers being squeezed by stagnant wages and rising inflation," said Katherine Chapman, director of the Living Wage Foundation.
"Great businesses know that, even during these tough times, not only is fair pay the right thing to do but paying the real living wage brings big benefits.
"Nine out of ten accredited Living Wage employers report real benefits including improved retention, reputation, recruitment and staff motivation."
The living wage increase comes a day after a KPMG report revealed that one in five Britons were earning below the real living wage, meaning there are as many as 5.5 million workers who are struggling to escape in-work poverty.
The total number earning below the living wage fell by 100,000 compared to last year — the first reduction in five years — but it was still a million higher than in 2012.
The report also revealed that 26% of female employees were earning less than the living wage, compared to 16% of males.