Person walking on pound sign
The 2.6% rate rise means the living wage is 21% higher than the national minimum wageReuters

Thousands of workers across the UK will benefit after the living wage increased to £7.85.

The 2.6% rate rise (up from £7.65 an hour) means the living wage is 21% higher than the national minimum wage of £6.50 per hour.

The Living Wage Foundation said that 35,000 employees across the country will see their pay packets rise because of the move.

"As the recovery continues it's vital that the proceeds of growth are properly shared," said Rhys Moore, the director of the Living Wage Foundation.

"It's not enough to simply hope for the best. The good news is that the number of accredited living wage employers has more than doubled this year – more than 1,000 employers across the UK have signed up."

The Mayor of London Boris Johnson is expected to announce that the London living wage will increase – it is currently £8.80 per hour.

The rate announcement coincides with research released by professional services firm KPMG, one of the Living Wage Foundation's partners, which found that 5.28 million UK workers are being paid less than the living wage.

The figures come after the Office for National Statistics said that the pay including bonuses for employees in the UK was 0.7% higher than a year earlier in the three months to August and wages excluding bonuses for employees in UK was 0.9% higher than last year.

In comparison, Consumer Price Index (CPI) inflation rose at a rate of 1.5% in the year to August.