The estimated 68,000 workers receiving the living wage will see an increase in pay when the UK rate rises by 40p/hour to £8.25/hour, Mayor of London Boris Johnson announced today.

The London living wage, for those working in the capital, will also see an increase of 25p/hour to take it to £9.40/hour. See's Budget Planner guide for help cutting costs.

Employers choose to pay the rate voluntarily and the living wages for London and for those outside the capital are set independently each year according to the basic cost of living.

The number of firms paying the living wage in London has increased from 429 to 724 in the past year and in total there are more than 2,000 employers across the UK that pay the rate – double the number from November 2014.

Companies opting to pay the living wage should implement the rise within six months.

Frances O'Grady, TUC general secretary, says: "It's good news that the number of living wage employers is growing. It's a basic standard many more employers should meet."

Both the London living wage and the UK-wide rate are above the national minimum wage of £6.70 an hour and the planned new national living wage of £7.20 for those aged over 25 from next April.

The rate outside London is calculated by the Centre for Research in Social Policy at Loughborough University, while the London living wage rate is calculated by the Greater London Authority's Living Wage Unit.

Additional reporting by Paloma Kubiak.