The real living wage will increase by 20 pence in London to £10.75 an hour, and by 30p to £9.30 an hour across the rest of the UK. It is payable to everybody over the age of 18 in the UK and is updated every year.
The changes came into play on Tuesday this week and employers have been encouraged to increase wages as quickly as possible, and have a six month deadline to do so.
What is the real living wage?
The real living wage is calculated by the Living Wage Foundation charity and is based on how much a family would need to earn to make ends meet in the UK.
Employers agree to pay it on a voluntary basis, and the number that have signed up to do so has increased to around 6,000.
The real living wage is different to the ‘national living wage’, which is a legal minimum rate set by the Government, which is currently £8.21 for adults over 25.
According to the Living Wage Foundation, a full-time worker paid the £9.30 real Living Wage will receive more than £2,000 in additional wages compared to current Government minimum. The charity says this is equivalent to nine months of a typical family’s food and drink bill.
Big businesses including IKEA, ITV, Everton Football Club and Crystal Palace Football Club, Aviva, Lush and Burberry are already signed up to pay the higher wage rate. More than a third of the companies currently in the FTSE100 pay the real living wage.
What do the Living Wage Foundation say?
Living Wage Foundation director Katherine Chapman said, “In this time of uncertainty today’s new Living Wage rates give a boost to hundreds of thousands of UK workers.
“Good businesses know that the real Living Wage means happier, healthier and more motivated workers, and that providing workers with financial security is not only the right thing to do, but has real business benefits.
“This year for the first-time cities and towns have announced big plans to grow the number of Living Wage Employers in their communities.
“We are delighted at the ambition of Cardiff and Salford to build Living Wage cities, with Cardiff planning to double the number of workers getting the real Living Wage to nearly 50,000, freeing many more families from the low pay trap. We hope to see many more towns and cities follow suit.”