Almost half a million workers employed by nearly 17,000 accredited Living Wage Employers are set for a pay rise as the voluntary real Living Wage increases to £14.10 an hour across the UK and £15.45 in London.
The UK rate is rising by 65p, or 4.8%, while the London rate will increase by 65p, or 4.4%. The new rates are intended to reflect the cost of living and apply to workers aged 18 and over employed by accredited Living Wage Employers.
The announcement coincides with the 25th anniversary of the Living Wage campaign. According to the Living Wage Foundation, the initiative has secured nearly £5 billion in pay rises for low-paid workers since it began, including almost £700 million in additional earnings over the past year alone.
Full-time workers earning the new real Living Wage will receive a pay increase worth more than £1,250 over the year.
Analysis by the foundation estimates that a full-time worker on the new UK rate would earn more than £2,700 a year above someone earning the government’s current minimum wage for workers aged 21 and over, which stands at £12.71 an hour. In London, the annual difference between the new real Living Wage and the government minimum would exceed £5,300.
The foundation said the additional income could cover eight months of household food costs or five months of housing and energy expenses for workers outside London. In the capital, the difference could cover 16 months of food costs or six months of housing and energy bills.
“Today’s increase to the real Living Wage will make a massive difference to hundreds of thousands of workers and their families up and down the country,” Emily Sawh, co-director of the Living Wage Foundation, said.
“They will be over £1,250 better off this year thanks to the rise, helping them achieve the decent standard of living they need to thrive.”
the increase would make a significant difference to workers and their families, helping them achieve a decent standard of living.
More than 2,000 employers signed up to pay the real Living Wage over the past year, including Uniqlo, the Department for Business and Trade and Coventry Building Society. The foundation said one in seven UK employees now works for an accredited Living Wage Employer.
Half of the FTSE 100 companies are accredited, alongside thousands of small and medium-sized businesses. These include retailers, hospitality businesses and service providers.
Nevertheless, an estimated 4.4 million workers in the UK are paid below the real Living Wage. Recent Living Wage Foundation research found that 61% of low-paid workers had cut back on food or heating, fallen behind on bills or housing payments, or taken out a payday loan to cover essentials over the past year. A further 37% had used a foodbank.
Sawh urged the employers to “do the right thing” by signing up to pay the real Living Wage and providing workers with the decent standard of living they need to thrive.
Retail trade union Usdaw welcomed the new rates, describing them as a boost for the lowest-paid workers.
Usdaw general secretary Joanne Thomas called on the government to make further “substantial increases” to statutory minimum wage rates to help close the gap with the real Living Wage.
“On taking power, Labour changed the remit of the Low Pay Commission, so that they take account of the cost of living and work towards ending rip-off youth rates. We call on the government to again announce substantial increases in statutory rates to help close the gap with the real Living Wage,” she said.
She also highlighted the importance of secure working hours alongside hourly pay, urging the government to ensure that guaranteed-hours contracts apply to every worker, as promised in Labour’s manifesto.
Thomas said the union would continue campaigning for a real Living Wage for all workers through negotiations with employers and its work on minimum wage policy.