New ‘real’ Living Wage rates announced for 2020/21

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The ‘real’ Living Wage – the voluntary hourly rate of pay recommended by the Living Wage Foundation – has risen to £9.50 across the UK and £10.85 in London.

More than 800 additional employers have been accredited with the Living Wage Foundation since the start of the Covid-19 pandemic, including the All England Lawn Tennis Club (The Championships, Wimbledon), Capital One, Network Rail and Tate & Lyle, taking the total number of organisations paying the enhanced rate to almost 7,000.

London-based workers at Living Wage Foundation-accredited organisations will see their minimum hourly pay increase by 10p to £10.85, while workers across the rest of the UK will see a 20p increase in hourly pay to £9.50.

The UK rate is 78p per hour more than the statutory national living wage (the national minimum wage rate for those aged 25 and over), while the London Living Wage is £2.13 per hour higher.

The Living Wage Foundation estimated that a full time employee working 37.5 hours per week earning the new Living Wage rate will receive more than £1,500 more annually compared to the current government minimum, rising to £4,000 in additional pay for workers in London.

The new rates apply to workers over 18 years of age from today (9 November) – the first day of the foundation’s Living Wage Week.

Living Wage Foundation director Laura Gardiner 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.

“Since the start of the pandemic employers have continued to sign up to a real Living Wage. During Living Wage Week it’s right that we celebrate those employers that have done right by workers and families, providing them with much needed security and stability even when times are hard. These are the employers that will allow us to recover and rebuild from this crisis.”

Living Wage, NLW and NMW rates

National living wage £8.72
21-24 year olds NMW £8.20
18-20 year olds NMW £6.45
16-17 year olds NMW £4.55
Real Living Wage UK £9.50
Real Living Wage London £10.85

It claimed that a fifth (20.3%) of employees – or 5.5 million jobs – were paid below the rate it recommends, which it claims meets the ‘real’ cost of living.

Northern Ireland had the highest proportion of jobs paying below the Living Wage (25.3%) and Scotland the lowest (15.2%).

Loraine Martins, Network Rail’s director of diversity and inclusion, said the firm already paid its staff the Living Wage, but obtaining official accreditation meant that “thousands” of workers in its supply chain would also benefit.

“The varied work that rail staff carry out on our trains, in our stations and on our tracks has never been more important than in recent months, where they have helped to keep Britain connected in challenging times by running a safe and reliable service for key workers and others relying on the railway. Our work with contractors and the Living Wage Foundation will ensure that railway staff are paid appropriately for their vital work,” she said.

Gerald Mason, senior vice president of Tate & Lyle Sugars, said it was proud to have been formally accredited as a Living Wage employer. “It has been the cleaners, security guards and catering staff who have kept our factories clean, safe and well-fed over the last six difficult months. We’re pleased to recognise their value and role in helping us feed the nation.”

The age from which employees are entitled to the statutory national living wage is due to reduce from 25 to 23 from 1 April 2021, although it is possible that this could be postponed due to the coronavirus pandemic.

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3 Responses to New ‘real’ Living Wage rates announced for 2020/21

  1. Avatar
    Claudia Lukacs 13 Nov 2020 at 8:47 am #

    My wage is 8.72£ I’m employed for 11 years and still working in central London. What i have to do?

    • Avatar
      Craig 14 Nov 2020 at 1:32 pm #

      Hi, speak to your HR/ pay roll department. If you work in central London then you should be getting £10.85 p/h, as I work in Barking, Essex and I get the ‘real living wage’.

      If no joy with your payroll/ HR department, then you should seek other advice.

    • Avatar
      Faye 24 Nov 2020 at 10:11 am #

      The London living wage is optional to Employers. It is a suggestion rather than a regulation. Therefore they are still within their rights to pay the National Minimum wage

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