- The National Living Wage, the government's legal minimum, will rise to £12.21 per hour on 1 April 2025 for workers aged 21 and over — but nearly 16,000 UK employers already go further by paying the higher, voluntary real Living Wage.
- The real Living Wage, set by the Living Wage Foundation, is the only UK wage rate independently calculated based on what people need to live. It currently stands at £12.60 across the UK and £13.85 in London.
- Full-time workers paid the new National Living Wage will still earn £760 less per year than those on the real Living Wage — a shortfall that could cover nearly three months of food for a household or two months of housing and energy costs.
- In London, the gap rises to £3,198 a year. The difference could pay for almost a year’s worth of food, or over four months of housing and energy costs.
- There are now 4.5 million jobs in the UK paid below the real Living Wage (1 in 6 jobs) – which marks the largest year-on-year increase in low-paid jobs since records began.
On 1 April, the government’s National Living Wage will increase to £12.21 an hour for workers aged 21 and over.
The Living Wage Foundation has welcomed the increase in the legal minimum as a step in the right direction, but points out that the rate still falls short of the real Living Wage, which is based on what workers need to live.
The real Living Wage is £12.60 across the UK and £13.85 in London, calculated independently each year to reflect the actual cost of living and cover essentials such as food, rent and bills. Unlike the government’s rate, it is voluntary and paid by nearly 16,000 accredited Living Wage Employers who choose to do right by their employees, including half of the FTSE 100 and thousands of businesses of all sizes.
Despite the increase, a full-time worker earning the new National Living Wage of £12.21 an hour will still earn £760 less per year than someone earning the real Living Wage. This is equivalent to almost three months of food for a household, or almost 2 months of housing and energy costs. In London, where living costs are higher, the gap between the National Living Wage and the London Living Wage rises to £3,198, enough for almost a year’s worth of food, or over four months of housing and energy costs.
The rise comes just weeks after Living Wage Foundation analysis revealing the largest year-on-year increase in the number and proportion of low-paid jobs since records began in 2012. In total, 4.5 million jobs in the UK are now paid less than the real Living Wage – that’s one in six. [1]
Research by Cardiff Business School, commissioned the Living Wage Foundation and released in February, found that if just a quarter of those earning below the Living Wage saw their pay rise to the real Living Wage, the increase in wages, productivity and spending would deliver £1.2 billion back into the UK economy. [2]
Katherine Chapman, Director of the Living Wage Foundation, said:
“The rise to the National Living Wage, the legal minimum wage, is a welcome boost for low-paid workers and will offer some protection against rising costs, but it still falls short of the real Living Wage which is the only rate that is independently calculated based on the cost of living.
“With low pay surging, it’s more important than ever that employers who can afford it are choosing to provide the security of a real Living Wage. It has been encouraging to see that, despite rising costs across the board, we are still seeing more and more employers stepping up to join the Living Wage movement and 1 in 6 employees now work for an accredited Living Wage employer. They know that decent pay and secure work is not just good for workers, it’s good for business too.
“Low pay and insecure work often go hand in hand and it's been great to see a real uptick in employers choosing to provide more stable contracts and better notice periods through the Living Hours scheme.”
Brett Mendell, Managing Director of Thomas Kneale, a textile merchant based in Manchester and a Living Wage Employer, said:
"We’ve paid the real Living Wage since 2015 because we believe everyone should earn enough to live on. It’s the right thing to do, and it makes business sense for us too.
“Our staff feel valued and secure, which means we have many colleagues with long service, who take pride in their work, and help us build a stronger, more resilient business.
“Even with rising costs for businesses like ours, we continue to see the benefits of paying our staff fairly, and we view it as an important investment.”
James Hennebry, CEO of Rosslyn Coffee, a London-based specialty coffee company and Living Wage Employer since 2018, said:
“At Rosslyn, paying above the Living Wage has always been a non-negotiable – it’s fundamental to who we are as a business. We believe success flourishes when it’s shared: we take care of our team, who take care of our guests, who drive the commercial success of the business. That success then enables us to keep investing in our team, creating a cycle that reinforces itself. The success of our sites, which are now among the busiest specialty coffee shops in the world, is shared with everyone who comes into contact with us. Paying the real Living Wage is fundamental to this model and helps us to attract and retain the very best people.”
Sam, who works for Living Wage employer Thomas Kneale, said:
“Having worked as a temp on a low paid, zero-hours contract earlier in my career, I know firsthand the challenges living on a low, unpredictable income can bring and the effect these challenges can have on a person’s health, wellbeing and general enjoyment of life.
“I rented and lived in some very unpleasant properties, I was unable to go on holidays, I rarely went out, I was constantly having to choose between one bill or another, I was always cancelling appointments as I couldn’t afford to get there.
“Now I'm paid a real Living Wage, these problems no longer exist. I am excited about my future, I am settled in a comfortable home, and if I want to go out from time to time I can. Now all my bills are paid by direct debit, and I can live my life on my own terms without the stress and anxiety of living with no money.”
ENDS
Living Wage Foundation media contacts for interviews and case studies:
- Léa Corban: [email protected] or 07539 055 565
- Matt Ford: [email protected] or 07507478967
- Liberty Brownlow: [email protected] or 07301283662
Notes to editors:
[1] Living Wage Foundation, ‘Employee Jobs Paid below the real Living Wage’ (2025), using data from the Office for National Statistics’ (ONS) Annual Survey for Hours and Earnings to reveal the number of jobs below the real Living Wage
[2] Cardiff Business School, ‘Real Living Wage Multiplier Tool’ (2025), unpublished.