London Mayor Boris Johnson
London Mayor Boris Johnson backed the hike (Reuters)

More than 30,000 low-paid UK workers stand to receive a pay boost of up to £400 a year after a hike in the so-called "Living Wage".

The country-wide threshold, which is calculated annually by the Centre for Research in Social Policy at Loughborough University against the basic cost of living in the UK, rose by 20p to £7.65 ($12.20, €9.03) an hour and the London Living Wage, which is calculated by the Greater London Authority's Living Wage Unit, increased from £8.50 to £8.80 an hour.

The rate is higher than the legal national minimum wage, which stands at £6.31 an hour for over-21s.

"The Living Wage has become a must have badge of honour for employers," said Rhys Moore, director of the Living Wage Foundation. "By looking out for the Living Wage badge you can now choose to support businesses that are doing right thing. It works just like Fairtrade and will grow even faster with consumer support."

A total of 432 employers are signed up to the campaign, up from 78 this time last year, including Legal and General, KPMG, Barclays, Oxfam, Pearson, the National Portrait Gallery, First Transpennine Express.

The organisations employ more than 250,000 workers and also commit to roll out the Living Wage in their supply chain.

"More and more London firms are recognising the benefits of fair remuneration for all of their workforce," added The Mayor of London Boris Johnson. "Paying the London Living Wage ensures hard working Londoners are helped to make ends meet, providing a boost not only for their personal quality of life but delivering indisputable economic dividends to employers too. This in turn is good for London's productivity and growth."

The rate rise follows the announcement by Ed Miliband that companies that pay workers the Living Wage with be given 12-month tax breaks if the Labour Party wins the next general election.

The leader said businesses would receive tax breaks of up to £1,000 in 2016 for every low-paid worker awarded a pay rise, under plans that form part of Labour's agenda to tackle Britain's cost of living crisis.