LONDON, Jan 23 (Reuters) - Lidl GB said on Tuesday it would raise hourly pay for its store and warehouse workers to up to 13.85 pounds ($17.64) in London and up to 13.00 pounds in the rest of the country from March, which it said was the highest in the supermarket sector.

The British arm of the German supermarket chain said the increase - the third in the last 12 months - represented an investment of more than 37 million pounds.

Lidl said its new entry level rates would be up to 17% higher than the national minimum wage, which will rise to 11.44 pounds an hour from April for workers over 21 years old.

Sainsbury's, Britain's second largest supermarket, said earlier this month it would raise pay to 13.15 pounds an hour in London and 12 pounds an hour outside London from March. ($1 = 0.7852 pounds) (Reporting by Paul Sandle, Editing by Kylie MacLellan)