Living Wage increases by 10% to reflect cost of living crisis
Almost 400,000 people working for over 11,000 real Living Wage Employers across the UK have received a cost-of-living pay boost, as the new Living Wage rates rise to £10.90 an hour (£1 increase) and £11.95 an hour in London (90p increase). This year’s Living Wage rates have been brought forward in recognition of the sharp increase in living costs over the past year.
The real Living Wage rates remain the only wage rates independently calculated based on what people need to live on. This year the rate increased by 10.1% in the UK, more than ever in the Living Wage Foundation’s 11-year history, reflecting sharp increases in living costs.
New research from the Cardiff Business School shows that Living Wage workers have benefitted from more than £338m in extra wages since the start of this year alone, with one in ten employees now working for an accredited Living Wage Employer.
Unlike the Government minimum wage (‘National Living Wage’ for over 23s – £9.50) the real Living Wage is the only wage rate independently calculated based on rising living costs. A full-time worker earning the new, real Living Wage would earn £2,730 a year more than a worker earning the current government minimum (NLW), and £1,950 more than their current pay.
In London, a full-time worker on the new real Living Wage rate would earn an additional £4,777.50 a year compared to a worker on the current NLW.
Over the past two years the Living Wage movement has continued to grow, with the number of Living Wage employers more than doubling. Major new Living Wage employers announced during that time include the Royal Albert Hall, Aston University, and the Excel Centre. They join half of the FTSE 100 companies, household names like Aviva, Everton FC, Ikea, Burberry 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 39 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.
A total of 4.8m workers in the UK are paid less than the real Living Wage. Research published last week by the Living Wage Foundation found that over the past six months more workers are skipping meals and using food banks than ever before.
Katherine Chapman, Living Wage Foundation Director, said:
“With living costs rising so rapidly, millions are facing an awful “heat or eat” choice this winter – that’s why a real Living Wage is more vital than ever. Today’s new rates will provide hundreds of thousands of workers and their families with greater security and stability during these incredibly difficult times. We are facing unprecedented challenges with the cost-of-living crisis, but businesses continue to step up and support workers by signing up to the Living Wage in record numbers. We know that the Living Wage is good for employers as well as workers, that’s why the real Living Wage must continue to be at the heart of solutions to tackle the cost-of-living crisis.”
Charles Cotton, senior reward adviser for the CIPD, the professional body for HR and people development, said:
“This is a significant increase to the real Living Wage and shows the importance of fair pay and good work for UK workers. While the increase in the real Living Wage will be welcome by thousands of low-wage workers, it may not be enough to improve financial conditions for some of the lowest paid employees in the current cost of living crisis. Employers should also consider other ways they can support employees’ financial wellbeing. As well as offering enough hours for staff to have a decent standard of living, organisations should review aspects of employment such as flexible working, career progression opportunities, and financial wellbeing benefits, for example occupational sick pay or hardship loans.
“There is also the challenge of businesses being able to afford this increase, as they too are suffering from significant cost increases. The latest Government support package for businesses should relieve some of the immediate cost pressures being endured by many employers, and we would still encourage workplaces to explore how they can help low-waged workers over this difficult period. The most sustainable way for employers to pay more is through improved productivity. This doesn’t mean forcing staff to work harder, but smarter. Employers should review how jobs, tasks and workplaces are designed to see where improvements can be made.”
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