- 10% increase in the real Living Wage as cost of living continues to hit low paid workers the hardest
- Over 460,000 Living Wage workers are set for a pay boost as 14,000 Living Wage employers are signed up to pay the new rates
- The new real Living Wage rates are now worth over £3,000 more per year in the UK than the minimum wage, and over £5,000 more in London
- £3bn in extra wages has gone to low paid workers since 2011
Over 460,000 people working for 14,000 real Living Wage Employers throughout the country are set for a vital cost-of-living pay boost, as the Living Wage Foundation’s real Living Wage rates rise to £12 an hour across the UK (£1.10 increase), and £13.15 an hour in London (£1.20 increase).
The real Living Wage, set by the Living Wage Foundation, remains the only wage rates independently calculated based on what people need to live on. This year the rate increased by 10% in the UK, reflecting persistently high costs for low paid workers.
Recent research by the Living Wage Foundation shows that despite inflation easing, the cost-of-living crisis is far from over for Britain’s 3.5m low paid workers. Recent polling of those earning below the real Living Wage found that 60% have visited a food bank in the past year and 39% regularly skipping meals for financial reasons.
The real Living Wage vs the ‘National Living Wage’ - the difference
Unlike the Government minimum wage (‘National Living Wage’ for over 23s - £10.42) the real Living Wage is the only wage rate independently calculated based on rising living costs and applies to everyone over 18.
A full-time worker earning the new, real Living Wage would earn £3,081 a year more than a worker earning the current government minimum (NLW), and £2,145 more than their current pay. In London, a full-time worker on the new real Living Wage rate would earn an additional £5323.50 a year compared to a worker on the current NLW.
There are 3.5m jobs (12.2% of employee jobs, or 1 in 8 jobs) paid less than the real Living Wage. According to Living Wage Foundation projections, the scale of low pay is predicted to increase to 4.3m (15.7% of jobs) in 2023.
Recent research published by the Living Wage Foundation found that despite easing inflation, the cost of living crisis is far from over for low paid workers, with 50% worse off than a year ago. 43% of low paid workers reported regularly using a foodbank (at least once per month), 60% have used a foodbank in the past year and 39% reported falling behind on household bills.
The Living Wage movement continues to grow
In the past two 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 14,000 Living Wage Employers, including half of the FTSE 100 companies and household names like Aviva, Everton FC, IKEA 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 also over 100 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.
Katherine Chapman, Living Wage Foundation Director, said:
“As inflation eases, we cannot forget that low paid workers remain at the sharp end of the cost of living crisis. ow paid workers continue to struggle with stubbornly high prices because they spend a larger share of their budget on food and energy. These new real Living Wage rates are a lifeline for the 460,000 workers who will get a pay rise .
During these tough economic times, it is heartening that record numbers of employers are signing up to join the Living Wage movement, protecting everyone who works for them – including cleaners -from rising prices and seeing the benefits of a more motivated and engaged workforce.. The real Living Wage has never been more important and we encourage those who can to join the 14,000 Living Wage employers across the UK who are committed to always pay a wage that covers the cost of living.”
Darren Taylor, Country People and Culture Manager, IKEA UK&IE, said:
“As a business with a vision to create a better everyday life for the many people, I’m proud of our continued commitment to pay a wage that reflects the real cost-of-living. This meaningful increase represents a significant investment to provide greater financial stability and security that better supports our co-workers' financial, mental, and physical wellbeing at a time when the cost-of-living continues to have a very real impact.”
Brett Mendell, Director at Thomas Kneale, a Living Wage Employer and textiles company based in Manchester, said:
"People are our biggest asset, and paying the real Living Wage and above has significant benefit to both our colleagues and to the company. Our team report lower stress and reduced financial anxiety, a higher standard of living, and a lift in morale. We have also seen productivity improvements while delivering a labour turnover reduction of 60% and a staff absence decrease of 75% since we became accredited in 2015. We're also a Living Hours accredited employer, so our team also has security of hours along with other benefits."
The Rt Revd Stephen Cottrell the Archbishop of York said:
"Too many families are suffering hunger and hardship, yet there is hope. Paying the real Living Wage to meet the true cost of living is one striking example of what employers can do to help workers lead a dignified life. The Living Wage campaign goes from strength to strength, a testament to the faith and determination of people up and down the country challenging poverty in our communities."
Kristina Maculska, who earns the real Living Wage and works in the catering team at the London Stadium, said:
“The rate rise makes a real difference to me and my family especially when the cost of living is so high, particularly in London. The real Living Wage has a positive impact on my motivation and productivity at work. Additionally, it helps to feel secure about tomorrow and maintain stable mental health, which is important for healthy relationships with colleagues and family.”
Notes to Editors:
Living Wage Foundation Media Contacts for interviews and case studies:
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 460,000 employees and delivered over £3bn 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 14,000 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 per hour. The London Living Wage is £13.15 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 over 100 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 21 Living Pension Employers committed to help workers build up a pension pot that will provide enough income to meet basic everyday needs in retirement.