INCREASING the standard £6.50 per hour Minimum Wage to match the Living Wage rate of £7.85 would benefit staff and businesses, KPMG has said.

In an analysis prepared ahead of this week's Budget, the accountancy giant said equalising the pay rates would add just 1.3 per cent to the national wage bill and lift six million people out of poverty. It said firms that had started paying the rate set by the Living Wage Foundation reported clear benefit to their businesses. Marianne Fallon, Head of Corporate Affairs at KPMG said: ""As a firm who has paid the Living Wage since 2006, we have seen the benefits of lower absence and a more engaged workforce." In March the Government said the Minimum Wage rate would increase to £6.70 from October.