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The real Living Wage vs the National Living Wage: What's the difference?

Today the government raised the National Living Wage (the legal minimum for over 23s) rates for 2022 to £9.50 for over 23s and to £9.18 for those under 23. The rise in the National Living Wage is a positive step for many workers who have been working hard and struggling to make ends meet.

Today's increase will go some way to easing the pressure on households, but there is still substantial gap between the government’s 2022 rate and the rising cost of living.The real Living Wage remains the only rate calculated based on the real cost of living and the new rate will be announced come into effect on the 15th November 2021.

There are some important differences between the government’s National Living Wage and the real Living Wage. So, what are the five key differences?

  1.  The real Living Wage is... based on the cost of living.
    The real Living Wage is the only wage rate calculated based on the true cost of living, whereas the National Living Wage is a % of average earnings. When living costs have been rising so sharply, it’s never been more important to pay a wage that provides a decent standard of living.
  2. The real Living Wage is...independently calculated and updated annually on the 15th November.
    The real Living Wage is calculated every year based on the best available evidence living standards in the UK and London. The new rates will be announced and come into effect on the 15th November 2021 during Living Wage Week.
  3. The real Living Wage.. applies to all workers 18 and over.
    Compared to the National Living Wage, the real Living Wage applies to all workers over 18. The National Living Wage applies only to over 23s.
  4.  The real Living Wage is... a voluntary rate paid by employers who choose to go beyond the government minimum
    The national Living Wage is the legal minimum for over 23s. The real Living Wage is a voluntary rate paid by employers who choose to go above and beyond the government minimum to ensure their staff are always paid a wage that covers the cost of living. Almost 9,000 employers are accredited with the Living Wage Foundation, including household names like Aviva, Google, Burberry, Everton FC and thousands of small-to-medium sized businesses. You can find a full list of accredited employers here. 
  5. The real Living Wage is...different for those living in London to reflect the higher cost of living 
    There are two real Living Wage rates: one for London (the London Living Wage!) to reflect the higher cost of living in the capital and one for the rest of the UK. The National Living Wage rate applies everywhere.


Still have questions about the real Living Wage and why it matters? Join us for our Living Wage Week event on the 15th November, 4pm-5pm where we’ll here from a panel of economic experts, trade unions and Living Wage employers to hear about how the rates are calculated, how accreditation works, as well as the benefit to your organisation, your staff and local community.  Register here.


27th October 2021
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