Just arrived at the Black Hound Inn in the Guilded Vale and added Aloth to the party. Looking at the character sheets I've noticed that he's a level 2 with XP of 2600/3000. My character XP reads 2300/1000. Assuming 1000 XP is what's needed to move up to level 2, but my character is still showing as level 1, and I cannot find any level up button anywhere. Can somebody please explain how characters level up in this game. Your help would be much appreciated.

One your characters portrait (on the bottom of the hud) there is a small yellow plus: click that to lvl

There should be a little gold glowing plus sign on the portrait.  Click that.

You have a plus symbol in your character portrait, press it to go to the leveling screen.

Ok thx guys