Red arrow rising in stages between pound coins
The Real Living Wage is set for another rise

What is the real living wage?

The ‘real living wage’ is an hourly rate of pay set independently of the Government by the Living Wage Foundation (LWF). It is updated annually, based on the cost of living.

How does it work?

Unlike the Government’s National Living Wage (NLW) / National Minimum Wage (NMW), which sets minimum hourly rates which employers are legally required to pay, the real living wage is paid voluntarily by over 14,000 UK businesses covering over 460,000 employees.

While NLW only applies to those aged 23 and over, the real living wage applies to all those over 18 years of age.

Why adopt it?

Businesses who are paying the real living wage report improvements in both business reputation and employee retention.

How much is it?

Research published by the LWF shows that, despite inflation easing, the cost-of-living crisis is far from over for Britain’s 3.5m low paid workers. Of those polled, 60% of people earning below the real living wage reported visiting a food bank in the past year, and 39% regularly skipped meals for financial reasons. In recognition of this, the LWF have announced an increase in the real living wage of £1.10 to £12 an hour in most of the UK and an increase of £1.20 to £13.15 an hour in London.

Readers may recall in our October 2023 Employer Focus article on the proposed rise in the NLW from April 2024 that the Chancellor has confirmed that he will accept the recommendations of the Low Pay Commission (LPC). It is expected that by adopting these suggestions the NLW will rise from £10.42 to over £11.

How to find out more

Employers can find out more about obtaining accreditation as a real living wage employer on the Living Wage Foundation website.

 

This article reflects the position at the date of publication (14 November 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since. 

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