National Living Wage rise

A welcome boost, but workers need more to tackle cost of living crisis.

As inflation hits the highest levels seen in decades, new research by the Living Wage Foundation shows that today’s National Living Wage rise to £9.50 per hour still leaves the UK’s lowest paid workers hundreds of pounds away from a wage that meets the cost of living, and thousands under for workers in London. The real Living Wage is £9.90 in the UK, and £11.05 in London.

Analysis found that a UK worker earning the National Living Wage would need an extra £780 each year to bring their income in line with the real Living Wage. This difference amounts to 3 months (13 weeks) of food bills or 10 weeks of housing costs, according to national averages.

With the cost of living in the capital far higher than the rest of the UK, a worker living in London and being paid the government’s National Living Wage would need to find more than £3,000 extra to bring their income in line with the London Living Wage. This difference represents nearly a year (43 weeks) of food bills, or 5 months (22 weeks) of housing costs.

The government’s National Living Wage is based on a target to reach two thirds of median earnings by 2024 and is the legal minimum wage for over 23s.

The Living Wage rates are the only wage rates independently calculated according to the cost of living in London and the UK, and nearly  10,000 UK employers have signed up to pay these higher rates. It applies to everyone over the age of 18. The real Living Wage rates will go up in November.

There are currently 4.8million jobs below the real Living Wage in the UK (1 in 6 workers).

Katherine Chapman, Director, Living Wage Foundation, said:

“The National Living Wage rise is welcome news for low paid workers, but it remains significantly lower than a real Living Wage based on what it actually costs to live. Even before the cost of living crisis, millions of workers and families were struggling to stay afloat.

“With bills continuing to rise, many more are now at risk of falling into financial hardship. If we’re to weather this storm we need employers to take action now, step up, and provide a real Living Wage that meets every day needs, giving security and stability for both employers and workers.”

Gavin Ryan, a Living Wage worker at Anchor Removals, said:

“When I started working for Anchor 10 years ago, the wages were poor and we were struggling. I found it really hard. Our Managing Director Chris changed us to a Living Wage Employer in 2016, as he had always said when we got through the tough times he would look after us and he has.

“Now, I have stability and job security, and the wages are helping me start to look for a new home as I still currently live with my mum. I can also look after my daughter and buy her the things she needs. During the pandemic, my partner Nic lost her job as a travel consultant and went to work for a supermarket. Her hours and pay were not great, but because I was earning the Living Wage with guaranteed hours, I knew I could support her. It was a life saver.”

Kim Coles, Finance Director, Lush, said:

“At Lush we are incredibly grateful to the Living Wage Foundation for providing an independently calculated real living wage rate for us each year; particularly in these tough times when our people need it the most. Lush staff making and selling our products are crucial to our success and we continue to commit to the rate to ensure that, as the cost of living continues to rise, we can be confident that our rates of pay are fair and that our staff can afford what they need to thrive, not just to survive.”

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). The rates are currently set at £11.05 in London and £9.90 in the rest of the UK. 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 10,000 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 £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 

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