Voluntary London living wage to rise by 25p an hour

The London living wage is to rise from £9.15 an hour to £9.40, the Living Wage Foundation campaign group has said.

While its recommended nationwide pay rate goes up from £7.85 an hour to £8.25 - an increase of 40p - in London the suggested rise is only 25p.

Next year, when the government brings in a compulsory National Living Wage across the United Kingdom, there will be no separate rate for London.

The living wage is calculated according to the basic cost of living.

The capital's voluntary living wage - which is not legally enforceable - is assessed by the Living Wage Foundation and economists at the Greater London Authority.

Mayor Boris Johnson's office estimates 724 employers in London have now signed up.

Those employers now have six months to implement the new pay level.

National minimum wage: The current mandatory minimum is £6.70 per hour for people aged 21 and over, and £5.30 for those aged 18 to 20

National Living Wage: This will be mandatory from April 2016 for workers aged 25 and above. It will initially be set at £7.20 an hour and is intended to exceed £9 an hour by 2020

London living wage: A voluntary higher rate of the living wage in the capital, which will rise from £9.15 to £9.40 an hour. There are currently no plans to make this scheme mandatory

Mr Johnson said the move would help "pay the people who work hardest on lowest incomes decently".

While he is a prominent supporter of the voluntary London living wage, he has resisted calls to make it mandatory, saying small businesses "would struggle with wage rigidity".

Labour's mayoral candidate Sadiq Khan called in-work poverty "a shameful blight on our city", adding: "Neither the government nor the mayor are doing enough to turn things round."

The Green Party highlighted disparity between the new recommended rate in London and the national minimum wage, external for Londoners aged 18 to 20, currently £5.30 an hour.

Assembly Member Baroness Jones said: "The mayor should be making the case for raising the minimum wage in London to a living wage, especially for young Londoners."