- 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
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.
The Living Wage movement continues to grow
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.”
Darren Taylor, Country People and Culture Manager, IKEA UK&IE said:
“A business’ success is purely driven by its people, and as a values-driven company, we care about our co-workers and their wellbeing. That’s why we’re committed to pay our co-workers a real Living Wage that creates a fairer, inclusive, and healthier standard of living for the many. We hope this year’s uplift, along with our enhanced flexibility and benefits offer, will provide co-workers’ with greater financial stability and the support needed to live a better everyday life.”
Taran, IKEA co-worker said:
“Being paid the Real Living Wage means I can support my mum, as well as pay for the more expensive things you need to do when you’re starting out in life, like learning to drive and saving up for a car. I don’t have to worry about living pay-check to pay-check, or working lots of overtime like lots of people I know on minimum wage. If something unexpected happens, I know I’ve got that money sitting there to deal with it.I know for a lot of people money has been difficult this year, but the Real Living Wage has definitely helped me out. It’s good for IKEA too, because if you’re getting a good wage, you’re going to be more productive, because you feel like you’re getting something out of the company and want to put something back into it in return.”
Mike Turner, Co-Founder of Bird & Blend Tea Co, said:
"At Bird & Blend, we believe that all our employees should be paid fairly based on the cost of living. We are committed to creating a working culture that supports our team and allows them to thrive, which is why we are part of the Living Wage Foundation. Introducing the living wage has not only reduced our turnover but improved recruitment too. The blend of treating people fairly and doing business in the right way is our recipe for a successful company and a happy team.”
Sharon Larkin, Director of HR at Apetito, said:
“We’ve always said that the Government’s minimum wage does not go far enough and have worked with the Living Wage Foundation in paying our staff the real Living Wage for the past 9 years. It’s something we feel passionately about as a business.
“We know it’s immensely important to our team. We believe that employees should receive a fair wage which not only improves their quality of life but also benefits our business and society as a whole. Not only does the real Living Wage support our recruitment and retention strategies, but we believe it’s the ‘right way to do business’. As part of our accreditation, we also insist that all our contractors adhere to the voluntary pay rates.
“We are a proud supporter of the real Living Wage and are committed to being a real Living Wage employer.”
John Pendrey, Customer Service Advisor at Wiltshire Farm Foods, said:
“I worked in the Hospitality sector for many years, earning minimum wage. Sometimes, tips would supplement my income, but they were unreliable, and I never knew what I would be taking home. This caused significant stress when trying to meet monthly outgoings.
Since joining apetito/Wiltshire Farm Foods, everything has changed. I now have a job and wage security, and with the real Living Wage, I know exactly where I stand. It has made a significant difference in my life.
It feels like the company genuinely understands how challenging it can be to make ends meet, especially with the cost-of-living crisis over the past two years.
This has made me appreciate apetito/Wiltshire Farm Foods as a good business that values my contribution.
We often talk to our customers about the rising costs these days and do our best to help them. It’s incredibly gratifying for us to feel valued and appreciated in return by being paid the real Living Wage”.
Adrian Mayo, Production Packing Operative at Love Joe’s Chicken, said:
“For years I was wanting to move out of my parents house but being on a low income didn’t allow me to do so.
I was very pleased when I got a job at love joes as the wage provided finally allowed me and my family to start making plans to get our own place. Within 4 months of working at Love Joes I was able to make that a reality, not only that but I still have money left aside for some of the nice things in life and with that me and my family are living a very happy life with no money struggles.
I feel blessed to be in the position I am now and I hope to be working for Love Joes for many years too come.”
Notes to Editors:
Living Wage Foundation Media Contacts for interviews and case studies:
Matt Ford – 07507478967, matt.ford@livingwage.org.uk
Emily Roe – 07581430577, emily.roe@livingwage.org.uk
Andy May – 07917824009, andy.may101@gmail.com
John Hood - 07507 173 649, john.hood@livingwage.org.uk
What is the real Living Wage?
The real Living Wage is an hourly rate of pay set independently and updated annually (not the UK government’s National Living Wage). It is calculated according to the basic cost of living in the UK, and employers choose to pay the Living Wage on a voluntary basis. According to the Living Wage Foundation, since 2011 the campaign has impacted nearly half a million employees and delivered nearly £3.5bn extra to some of the lowest paid workers in the UK. Find out more here.
About the Living Wage Foundation
The Living Wage Foundation is the institution at the heart of the independent movement of businesses, organisations and people who believe that a hard day’s work should mean a fair day’s pay. We recognise and celebrate the leadership shown by the 15,000 Living Wage Employers across the UK who voluntarily commit to ensure their staff earn a real Living Wage that meets the cost of living. We are an initiative of Citizens UK.
Only the real Living Wage is calculated according to the cost of living in the UK and in London. Employers choose to pay this wage on a voluntary basis. The real Living Wage applies to all workers over 18 – in recognition that young people face the same living costs as everyone else. It enjoys cross party support.
The UK Living Wage for outside of London is £12.60 per hour. The London Living Wage is £13.85 per hour. These figures are calculated annually by the Resolution Foundation and overseen by the Living Wage Commission, based on the best available evidence on living standards in the UK and in London.
Living Hours and Living Pension
The Living Wage Foundation has also developed two complementary schemes for employers who want to go beyond paying the real Living Wage to support their staff.
Living Hours is a new standard designed to tackle insecurity of hours. 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.
Living Pensions is a voluntary savings target for employers that was developed to tackle poverty in retirement. There are now over 50 Living Pension Employers committed to help workers build up a pension pot that will provide enough income to meet basic everyday needs in retirement.