More than 250,000 workers across the UK are set to benefit from an increase in the real Living Wage to £9.50 an hour, in a bid to help workers and their families through the pandemic.
What is the real Living Wage?
The real Living Wage – calculated by charity the Living Wage Foundation – is designed to be a more accurate calculation of the cost of living in the UK compared with the government’s own measure, the National Living Wage.
Businesses volunteer to sign up to the Living Wage Foundation’s scheme, which means they must pay their staff the minimum set by the charity.
Today’s increase of 10 pence an hour puts the real Living Wage at £9.50 an hour. In London, a 20 pence increase puts the new hourly rate at £10.85.
By contrast, the National Living Wage is capped at £8.72 an hour for workers over the age of 25.
According to the Living Wage Foundation, a full-time worker paid the real Living Wage will now earn £1,500 in additional wages every year, compared to the current Government minimum (for over-25s).
For a full-time worker in London, that rises to over £4,000.
Who pays the real Living Wage?
Currently, 7,000 businesses are accredited by the Living Wage Foundation – 800 of which joined since the start of the pandemic – which means they have committed to paying their staff higher rates of pay than they are legally bound to.
The most recent businesses to join the scheme include Tate and Lyle, Network Rail, the All England Lawn Tennis Club, and Capital One.
Larger companies already part of the scheme include Ikea, Aviva and Nationwide building society.
But research by the Living Wage Foundation into pay levels during the pandemic revealed that 5.5 million jobs (20.3%) of employee jobs still pay less than the real Living Wage. It also found that more women than men were earning less than the threshold in April 2020.
Laura Gardiner, director at the Living Wage Foundation Director, said: “It’s an incredibly challenging time for us all, but today’s new Living Wage rates will give a boost to hundreds of thousands of UK workers, including thousands of key and essential workers like cleaners, care workers, and delivery drivers who have kept our economy going.”
What is the National Living Wage?
In comparison to the real Living Wage the government’s rates, which set the lowest permitted legal rate of hourly pay, depends on a worker’s age and if they’re an apprentice.
Almost all workers are entitled to the National Minimum Wage as long as they are of school leaving age. This includes casual workers, staff on zero-hours contracts and agency workers. Current hourly rates are below:
· Apprentices: £4.15 an hour
· Under 18s: £4.55 an hour
· 18 – 20-year-olds: £6.45 an hour
· 21 – 24-year-olds: £8.20 an hour
· 25 and over: £8.72 an hour (the National Living Wage)
Rates are set throughout the UK, including those working in London.
It is illegal for an employer to pay less than the National Minimum Wage. You can find more information on how to take action at the Money Advice Service.