It has been announced that the UK Living Wage rate has been increased by 20p to £7.65 an hour. The wage, which is not binding on employers, will benefit more than 30,000 low paid workers and will be worth up to an additional £400 a year. A total of 432 employers have signed up to pay the rate, up from 78 last year.The Living Wage is a voluntary scheme, which is set independently each year, based on the basic cost of living in the UK. The wage is much higher than the legal UK minimum wage of £6.31 an hour and is now seen as “a must-have badge of honour for employers” according to 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,” he added.Barclays, who are one of the firms to have signed up to the voluntary scheme, said paying the rate had improved retention rates for its cleaners. “Early research on the impact of the Living Wage for cleaners on Barclays’ contracts shows our suppliers have a 92% retention rate versus an industry average of 35%.”In October, Labour leader Ed Miliband said if his party won the next election, he would increase the incentives to firms that run the scheme by offering firms a 12-month tax break in 2016 if they agree to pay the living wage.The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.Setfords Solicitors are a national full service law firm, with employment law solicitors in Coventry and across the country.