Almost half a million workers to benefit from Living Wage boost

LIVING WAGE MOVEMENT CONTINUES TO GROW

• Almost half a million Living Wage workers are set for a pay boost as over 15,000 Living Wage Employers are signed up to pay the new rates 
• The real Living Wage is the only UK wage rate independently calculated based solely on the actual cost of living and is different from the government’s National Living Wage, which is the legal minimum employers must pay for over-21s 
• The new real Living Wage rates are now worth over £2,262 more per year in the UK than the legal minimum, and over £4,700 more in London  
• Nearly £3.5bn in extra wages has gone to low paid workers since 2011 

The Living Wage Foundation has revealed that the Real Living Wage will increase to £12.60 next year.

Almost half a million people working for more than 15,000 real Living Wage Employers throughout the country are set for a vital cost-of-living pay boost, as the real Living Wage rates rise to £12.60 an hour across the UK (60p or 5% increase), and £13.85 an hour in London (70p or 5.3% increase). 

Recent research by the Living Wage Foundation shows that despite inflation easing, many of Britain’s 3.7m low paid workers are still struggling with the impact of years of high prices, with 42% having less than £10 left each week after covering essential expenses, 39% having used a food bank in the past year and 32% have skipped meals for financial reasons. 

The real Living Wage vs the ‘National Living Wage’ – the difference 

The real Living Wage is different to the government’s minimum wage rate, which for those over the age of 21 is often called the “National Living Wage”. It is a higher, voluntary rate that is independently calculated based solely on the actual cost of living. The Government’s rate is the legal minimum businesses are required to pay by law.    

The real Living Wage applies to all workers over the age of 18 working for a Living Wage Employer and is £12.60 an hour. The ‘National Living Wage’ applies to those over the age of 21 and is worth £11.44 an hour.  

A full-time worker earning the new, real Living Wage would earn £2,262 a year more than a worker earning the current government minimum (NLW), and £1,170 more than their current pay. In London, a full-time worker on the new real Living Wage rate would earn an additional £4,700 a year compared to a worker on the current NLW, and £1,365 more than their current pay.  

Despite the economic challenges, in the past three years record numbers of employers have signed up to pay the real Living Wage, including to their third-party contractors like cleaners and security guards, with 1 in 9 employees now working for an accredited Living Wage Employer.  

There are now over 15,000 Living Wage Employers, with recent accreditations including Pieminister, Fred Perry and the National Theatre. They join half of the FTSE 100 companies, household names like Aviva, Everton FC, Ikea, Burberry and LUSH as well as thousands of small businesses, who are choosing to pay the real Living Wage to provide workers and families with greater security and stability. 

There are now 180 Living Hours Employers, including abrdn, Aviva, and West Brom Building Society, going beyond payment of the real Living Wage to also provide a guaranteed minimum of 16 hours work a week, a month’s notice of shift patterns and a contract that reflects hours worked.  

Over 50 employers who want to ensure their workers never face poverty in retirement are signed up to the Living Wage Foundation’s Living Pension accreditation. Living Pension Employers provide a Living Pension savings level using either a cash (£2,950) or percentage (12%) target, with a minimum of 7%, or £1,720, contribution coming from the employer. 

Katherine Chapman, Living Wage Foundation Director, said: “Low paid workers have been hardest hit by the cost-of-living crisis and are still struggling to stay afloat amidst persistently high prices.

“The real Living Wage remains the only UK wage rate calculated based on actual living costs, and the new rates announced today will make a massive difference to almost half a million workers who will see their pay increase. 

“It’s a challenging time for businesses too, which is why it is so encouraging to see the Living Wage movement continue to grow at pace. This year, we reached the major milestone of 15,000 accredited Living Wage Employers – with half of them signing up since 2021.

“Employers who want to go beyond the Government’s minimum wage and ensure their workers are paid in line with the real cost of living can look to these leading employers and accredit with the Living Wage Foundation.”

The City of Edinburgh Council is a Living Wage employer.

Responding to the news, Councillor Jane Meagher, Housing, Homelessness and Fair Work Convener, said: “Thousands of workers across Edinburgh are set for a boost in pay from May thanks to the new Living Wage rate.

“Helping our city’s workers as the cost of living soars, the rate set by the Living Wage Foundation will rise by 60p to £12.60 an hour across the UK.

“Too many people in our city have been pushed into deprivation because of insecure work. It really can happen to any of us and that is why the Living Wage is such a powerful tool for making sure people are paid fairly for their work.

“Considering the increasing pressures businesses are also under, we are so appreciative of the way Edinburgh employers continue to lead the way in Scotland, making Living Wage the norm.”

The city council is supporting calls for fairer pay in local government.

Following agreement by the Policy and Strategy Committee, the Council Leader will write to the Scottish and UK Governments requesting new funding for local councils to support a pay award for all workers, in line with calls from trade unions.

Council Leader Cammy Day said: “There are 80,000 people living in poverty in Edinburgh and because of the soaring cost of living, in-work poverty is rising. One of the most effective ways we can prevent hardship is to provide people with a fair day’s pay for a fair day’s work.

“We have close to 20,000 Council workers keeping our city clean, safe and moving and we’re calling on Government to properly and fully fund a fair pay award for each one.”