The voluntary Living Wage will rise by 40p to £8.25 per hour, the body that sets the rate of pay has announced.
London Mayor Boris Johnson said the Living Wage in London would rise by 25p to £9.40.
More than 2,000 businesses pay the Living Wage to their combined 70,000 workers. But it is not to be confused with the 'National Living Wage', the compulsory wage of £7.20 for over 25s being introduced in April.
Sarah Vero, director of the Living Wage Foundation, said: "Today we are celebrating those 2,000 responsible businesses that are voluntarily paying the living wage to their staff.
"These employers are not waiting for government to tell them what to do. Their actions are helping to end the injustice that is in-work poverty in the UK now."