150,000 workers to receive increased living wage

6 November 2017

More than 150,000 workers are to receive a pay boost as the real living wage is increased by at least 30p per hour.

Employers who have signed up to the voluntary living wage scheme will now be required to pay their employees at least £8.75 an hour, 30p more than its previous level.

Workers in London – where living costs are substantially higher – will see their hourly pay boosted by 45p to £10.20 an hour.

These rates come into force today and the 3,600 firms signed up to the Living Wage Foundation’s voluntary scheme must start paying the higher rates within six months.

The news comes as a welcome relief to low-paid workers. Research from accountancy firm KPMG shows that more than one in five workers in the UK – an estimated 5.5 million people – are still earning below the living wage and are battling against in-work poverty.

The real living wage is calculated by the Resolution Foundation and the Living Wage Commission and considers the amount of money needed to sustain a reasonable standard of living.

It differs from the government’s national living wage, which replaced the minimum wage for workers aged 25 and over in April 2016. The government requires employers to pay £7.50 an hour to these workers.

Younger employees are still paid the lower national minimum wage. This is £7.05 an hour for those aged between 21 to 24, £5.60 for workers aged 18 to 20, and £4.05 per hour for under 18s.

By comparison, the real living wage is a flat rate for all age groups.

Firms already accredited by the Living Wage Foundation and paying the voluntary living wage include Aviva, British Gas, Ikea, and Nationwide.

‘New living wage rates will bring relief for thousands’

Living Wage Foundation director, Katherine Chapman, says this increase will be a lifeline for workers already battling rising inflation and poor wage growth.

“In-work poverty is today’s story,” she says. “New figures show that 5.5 million people are still paid less than the real living wage – it’s fantastic that this year alone over a thousand more employers have chosen to go beyond the legal minimum and pay a real living wage, putting fairness and respect at the heart of their business.

“The new living wage rates announced today will bring relief for thousands of UK workers being squeezed by stagnant wages and rising inflation. It’s thanks to the leadership of over 3,600 employers across the UK who are committed to paying all their staff, including cleaners and security staff, a real living wage.”

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