Almost half a million workers across the UK are set to receive a pay rise worth more than £1,250 a year following an increase in the real Living Wage. The new hourly rates, announced on 15 October, have risen to £14.10 across the country and £15.45 in London.
The increase affects employees working for nearly 17,000 accredited employers, including IKEA, Uniqlo and Everton FC. Unlike the Government’s statutory minimum wage, the real Living Wage is a voluntary rate calculated according to living costs. The announcement also coincides with the 25th anniversary of the Living Wage campaign.
New Hourly Rates Bring Higher Annual Earnings for Workers
The real Living Wage has increased by 65p an hour across the UK, rising from £13.45 to £14.10, representing a 4.8% increase. In London, the hourly rate has risen from £14.80 to £15.45, an increase of 4.4%.
According to the Living Wage Foundation, full-time employees receiving the new rates will earn more than £1,250 extra annually. The organisation estimates that someone earning the updated real Living Wage will receive over £2,700 more each year than a worker paid the Government’s current minimum of £12.71 an hour for those aged over 21.
The difference is greater in London, where a full-time employee receiving the London Living Wage will earn more than £5,300 annually above the statutory minimum.
As reported by the York Press, the foundation estimates that the additional earnings outside London could cover eight months of household food costs or five months of housing and energy expenses. In the capital, the corresponding figures are 16 months of food costs or six months of housing and energy bills.
The new rates apply to employers accredited by the Living Wage Foundation rather than every business operating in Britain. More than 2,000 employers joined the scheme over the past year, including Coventry Building Society and the Department for Business and Trade.
Living Wage Campaign Marks 25 Years Amid Continuing Financial Pressures
The announcement comes 25 years after the Living Wage campaign began in east London, where low-paid workers organised to demand better wages.
According to the Express, the campaign has generated nearly £5 billion in additional earnings for low-paid workers since its inception, including almost £700 million during the past year alone.
Despite that progress, the Living Wage Foundation estimates that 4.4 million workers remain below its recommended hourly rate. Its research found that 61% of low-paid employees had reduced spending on food or heating, fallen behind on payments or taken out payday loans to cover necessities during the previous year. The same research found that 37% had used a foodbank.
Emily Sawh, co-director of the Living Wage Foundation, said the increase would make a difference to hundreds of thousands of workers and their families. She also urged more employers to adopt the voluntary rates.
Unison general secretary Andrea Egan called for further action on low pay, particularly among care workers, as households continue facing rising food and energy costs. Meanwhile, the foundation reports that one in seven UK employees now works for an accredited Living Wage employer. Half of FTSE 100 companies are also accredited, alongside thousands of smaller businesses.
