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Updates from the Living Wage Foundation

Real Living Wage increases to £9.90 in UK and £11.05 in London as cost of living rises.

  • Over 300,000 Living Wage workers are set for a pay boost  
  • More than £1.6 billion in extra wages has gone to low-paid workers since the start of the Living Wage movement 20 years ago 

  • £613 million in extra wages has gone to low-paid workers since the start of lockdown, with a record number of employers signing up - over 3,000 since the pandemic began [1] 

  • Greater London Authority and Greater Manchester Combined Authority are today making announcements on their progress to becoming Living Wage City Regions 

  • Despite these successes, 4.8 million employees (1 in 6 workers) are still paid below the Living Wage, with those from racialised groups1 more likely to be paid below the Living Wage than white workers (19.4% compared to 16.3%).  

Over 300,000 people working for almost 9,000 real Living Wage Employers throughout the country are set for a vital pay boost as the new Living Wage rates rise to £9.90 across the UK (40p increase), and £11.05 in London (20p increase), supporting workers and families. The Living Wage rates are the only rates independently calculated based on what people need to live on. 

This year the movement for a real Living Wage celebrates its twentieth year, with new research from the Cardiff Business School showing Living Wage workers have benefitted from more than £1.6bn in extra wages during this period. One in 13 workers now work for an accredited Living Wage Employer.  

 

The new Living Wage rates and the ‘National Living Wage’ - know the difference 

Unlike the Government minimum wage (‘National Living Wage’ for over 23s - £8.91 rising to £9.50 in April) the real Living Wage is the only wage rate independently calculated based on rising living costs – including fuel, energy, rent and food. A full-time worker earning the new, real Living Wage would earn £1,930 a year more than a worker earning the current government minimum (NLW). For a worker today that’s the equivalent of 7 months of food bills and more than 5 months' rent based on average household spending in the UK.[2] Even on next April’s higher NLW rate of £9.50, a full-time worker on the real Living Wage would earn £780 more. 

In London, a full-time worker on the new real Living Wage rate would earn an additional £4,173 a year compared to a worker on the current NLW and £3,022 more than a worker on next year’s National Living Wage.  

The increase in Living Wage rates this year has largely been driven by rising fuel and rent costs.[3] 

 

The Living Wage movement continues to grow 

Major new Living Wage employers announced today include FTSE 100 construction firms Taylor Wimpey and Persimmon Homes, Fujitsu, food delivery company Getir, and Capita. They join half of the FTSE 100 companies, household names like Aviva, Everton FC, Burberry and Lush as well as thousands of small businesses, who are choosing to pay the real Living Wage to ensure all staff earn a wage that meets the real cost of living. More than 3,000 employers have now accredited with the Living Wage Foundation since the start of the pandemic. 

Metro Mayors in London and Greater Manchester have also today announced major new commitments to create Living Wage City Regions which could see thousands more pay rises.  

Looking globally, the Living Wage campaign also today launches Living Wage for US, the first coordinated national effort set up to ensure that workers across the United States are paid a real Living Wage. 

 

Low pay in the UK  

The announcement of the new rates comes as new research by the Living Wage Foundation has demonstrated the scale of low pay during the pandemic, with 4.8 million jobs (17.1% of employee jobs) still paying less than the real Living Wage. Northern Ireland had the highest proportion of jobs paying below the Living Wage (21.3% or 236,000) and the South East the lowest (12.8% or 533,000). [4] 

Those from racialised groups were more likely to be low paid – with 19.4% of these workers earning below the LW compared to 16.3% of white workers.  
 
Katherine Chapman, Living Wage Foundation Director, said: 

“With living costs rising so rapidly, today’s new Living Wage rates will provide hundreds of thousands of workers and their families with greater security and stability.  

For the past 20 years the Living Wage movement has shaped the debate on low pay, showing what is possible when responsible employers step up and provide a wage that delivers dignity. Despite this, there are still millions trapped in working poverty, struggling to keep their heads above water – and these are people working in jobs that kept society going during the pandemic like social care workers and cleaners. We know that the Living Wage is good for businesses as well as workers, and as we rebuild our economy post pandemic, the real Living Wage must be at its heart.” 

The Archbishop of York, the Most Revd Stephen Cottrell, said:

“This Living Wage Week, the Living Wage Foundation has announced the new rates that cover what we all need to earn to get by. Their movement will see over 9,000 businesses elect to give their 300,000 workers not only what they need to survive, but to thrive as well. The principle behind the campaign for better pay and secure working conditions ought to be a pillar of our new society, and one I hope will be adopted by even more forward-thinking businesses as we look ahead to 2022.” 

Sarah Wadsworth, Fujitsu UK HR Director, said: 

“I am delighted that Fujitsu have signed as a Real Living Wage employer. This long-term commitment is not only the right thing to do for our employees but also ensures that our suppliers and partners are also planning to align to this for their employees. Fair pay for all employees continues to be relevant for our business as well as the benefits it brings to wider communities.” 

Anne Billson-Ross, Taylor Wimpey Group HR Director, said: 

“This voluntary commitment is a fantastic example of the direct action we are taking to ensure we remain an employer of choice, committed to do the right thing by our employees, suppliers and subcontractors.” 

Dean Finch, Group Chief Executive of Persimmon Homes, said: 

“I want all our employees to feel valued and fairly paid for the good work that they do. Paying the real Living Wage is an excellent way of demonstrating this. I am therefore delighted we have become a Living Wage Foundation accredited employer and joined what is an important campaign.”  

Kim Coles, Finance Director at Lush, said: 

"At Lush we are committed to a fair wage at all levels of the business and fully support the UK Living Wage Foundation's approach of a hard day's work deserving a fair day's pay. We have been paying the London Living Wage since 2011 and paying all UK staff at or above the "real" hourly Living Wage rate since April 2017. We continue to commit to the rate in tough times because that is when our people need it the most, and it's the right thing to do. Lush staff are crucial to our success, and they work incredibly hard making and selling our products. Having an independently calculated real living wage rate means that we have a positive step towards staff being able to afford what they need to thrive, not just survive. It also means that the same fair trade commitment we make to our ingredient suppliers is made to our staff and that we can be confident their rates of pay are fair and increase in line with real living costs."   

Turancan Salur, General Manager at Getir, said: 

"At Getir we pride ourselves on being a great employer. As well as paying all our colleagues at least the real Living Wage, with the opportunity to earn more through bonuses, we provide pensions, sick pay, paid leave, insurance and all PPE and electric delivery vehicles. 

“It is only right and fair that we do this as our workforce is the most important part of our business and we fully support the Living Wage Foundation for promoting such an important issue.”    

Ryan, a Living Wage worker at COOK Food, said:

“Before joining COOK I’d worked in a pub for two years. I was on minimum wage and I was working at least 50 hours a week to pay the rent. Even though I was working so hard, I started to get in debt. My relationships suffered, and it started to affect my health both mentally and physically. 

“However, since coming to COOK, being paid the real Living Wage made all the difference. I could work only 40 hours a week and take home more than when I was working 50 or 60 hours at the pub. 

“Gradually my mental health improved, and I also started to live more healthily. I lost 30kg because I actually had the time and money to make real food, eat properly and exercise. My relationships improved as I had time to spend with my friends and made new friends at COOK, too.” 

 

Notes to Editors: 

Living Wage Foundation Media Contacts for interviews and case studies: John Hood - john.hood@livingwage.org.uk / 07507 173649 or Tom Blin - thomas.Blin@livingwage.org.uk / 07706 217589 
 
Living Wage Week, from 15-21 November 2021, is a UK-wide celebration of the almost 9,000 employers that have voluntarily committed to ensure employees and sub-contracted staff earn a real Living Wage. This includes half of the FTSE 100 and major household names such as Everton FC, Aviva, Burberry, and Nationwide.  

[1] Analysis provided by Cardiff Business School (CBS). Total uplift (aggregate and year on year) for workers paid the real Living Wage is modelled according to different sectors, regional wage variations and full-time and part-time employees.  

[2] Living Wage Foundation analysis of (ONS) 2021. Family spending in the UK: April 2019 to March 2020 

[3] The real Living Wage is different to the Government minimum wage for over 23s, called the ‘National Living Wage (NLW). While the real Living Wage is independently calculated based on living costs and is paid by employers voluntarily, the government’s NLW is based on a percentage of median earnings, and all employers are required to pay it.   

The new Living Wage for the UK (£9.90) is 99p per hour more than the current government minimum wage for over 23s (£8.91) and the London Living Wage is £2.14 per hour higher. A full-time worker paid the new £9.90 real Living Wage will receive over £1,930 in additional wages annually compared to the current Government minimum. For a full-time worker in London this figure rises to over £4,170. The new UK Living Wage rates will also be 40p higher than next year’s NLW of £9.50, due to come into force next April. The difference will be worth around £780 a year. 

These calculations are based on working for 37.5 hours a week, for 52 weeks. £9.90 x 37.5 x 52 = £19,305 for someone earning the real Living Wage and £21,547 for someone earning the London Living Wage of £11.05, compared to £17.374.5 for a full-time worker, over the age of 23 (and therefore eligible for the National Living Wage), earning the government’s National Living Wage rate of £8.91. A worker earning 2022’s NLW rate of £9.50 an hour will earn £18,525 a year.  

A full research briefing is available from the Resolution Foundation on key factors behind the rate calculation and its rise this year.   

[4] A full report on the number and proportion of employee jobs paid below the Living Wage (and the methodology for calculating these) is available on demand. 

 

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 over 300,000 employees and delivered over £1.6bn extra to some of the lowest paid workers in the UK.  
 

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 nearly 9,000 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 from Monday 15th November is £9.90 per hour. The London Living Wage is £11.05 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. 

 

 

15th November 2021
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