Thirty-five thousand workers will benefit from today’s 20p boost to the living wage — but more than five million will continue toiling for poverty pay.

The rate rise, announced to mark the start of living wage week, will see workers benefiting from the scheme outside London take home £7.85 an hour.

London’s £8.80 living wage will also be topped-up today — and a surge in the number of companies signed-up to the scheme will see some 60,000 workers across Britain pocket a fair day’s pay.

Celebrations have been cut short though by a sobering KPMG analysis which also shows a rise in the number of workers not paid a living wage.

It shows that 147,000 have joined the massive pool of 5.2 million underpaid workers in the last year.

Across Britain, 22 per cent of people earned less than £7.65 an hour and that rises to a startling 25 per cent in north-east England and the Yorkshire and Humber region.

The percentage of people on poverty pay in Wales, the Midlands, north-west and south-west England also exceeds the national average.

TUC general secretary Frances O’Grady said the figures prove Chancellor George Osborne is building “the wrong kind of recovery” based on low-wage jobs.

“People deserve a fair day’s pay for an honest day’s work,” she said.

“But low pay is blighting the lives of millions of families. And it’s adding to the deficit because it means more spent on tax credits and less collected in tax.”

Auditing firm KPMG’s research reveals that young, part-time and female workers are most likely to be denied decent pay.

The profile of the person least likely to be on a living wage was revealed to be a 26-year-old woman working in outer London as a sales assistant.

And the consequences have been a deepening dependency on credit, with those on low wages twice as likely to have turned to loans compared to their well-paid peers.

KPMG spokesman Mike Kelly told bosses to stop “hiding behind the argument that increased wages hit their bottom line.”

He said: “With the cost of living still high, the squeeze on household finances remains acute, meaning that the reality for many is that they are forced to live hand to mouth.”

Living Wage Foundation director Rhys Moore called on bosses to follow the example of the 1,000 business es that have now signed up to the voluntary scheme.

GMB national officer Martin Smith welcomed the rise — but said any wage less than £10 an hour “means just existing, not living.

“It means a life of isolation, unable to socialise, a life of constant anxiety over paying bills and of borrowing from friends, family and payday loan sharks just to make ends meet — it’s no life at all on the living wage,” he said.