The Living Wage Foundation has announced that the Real Living Wage is set to be increased by 10% for workers who are on it, but what is the difference between that and the National Minimum Wage?

There are more than 460,000 workers on the Real Living Wage which is a voluntary rate paid by around 14,000 employers.

It was announced that this will increase to £12 an hour for those living outside of London (up from £10.90) and £13.15 for those in the capital (up from £11.95).

Whilst the Real Living Wage is a voluntary measure to meet for employers, the National Minimum Wage is a legal requirement.

News Shopper: The National Minimum Wage is a legal requirement for employers to payThe National Minimum Wage is a legal requirement for employers to pay (Image: PA)

What is the difference between the Real Living Wage and the National Minimum Wage?

On The Living Wage Foundation website, it says the Real Living Wage is "the only UK wage rate based on the cost of living."

"It is voluntarily paid by over 13,000 UK businesses who believe their staff deserve a wage which meets everyday needs - like the weekly shop, or a surprise trip to the dentist," they add.

A range of employers pay this rate including Nationwide, Google, LUSH, Everton FC and Chelsea FC.

In comparison, the National Minimum Wage "is the minimum pay per hour almost all workers are entitled to" according to the Government website.

The National Minimum Wage is dependent on the age of the employee, as if you are an apprentice or under the age of 18 it is currently £5.28 an hour.

This rises to £7.49 for 18-20-year-olds, £10.18 for 21-22-year-olds and £10.42 for those who are aged 23 and older.

For those who are in the 23 and over bracket, the terms change from the National Minimum Wage to the National Living Wage.

The National Living Wage is set to go up to £11 an hour in April, Chancellor Jeremy Hunt has said.