The ‘real’ Living Wage, the voluntary rate calculated based on what people need to live on, has increased to £9.90 an hour across the UK and £11.05 an hour in London.
The rate is paid by employers who have voluntarily signed up to be certified by the Living Wage Foundation. It is not to be confused with the national living wage – the legal minimum hourly rate that employers must pay staff aged 23 and over – which is currently £8.91 an hour but will rise to £9.50 in April 2022.
The new Living Wage rates, set by the Living Wage Foundation, apply immediately. Staff working for accredited Living Wage employers in London will see their hourly pay increase by 20 pence, up from the current £10.85 per hour, while those across the rest of the UK will receive an additional 40 pence per hour, up from £9.50 an hour.
Katherine Chapman, Living Wage Foundation director, said: “With living costs rising so rapidly, today’s new Living Wage rates will provide hundreds of thousands of workers and their families with greater security and stability.
“For the past 20 years the Living Wage movement has shaped the debate on low pay, showing what is possible when responsible employers step up and provide a wage that delivers dignity. Despite this, there are still millions trapped in working poverty, struggling to keep their heads above water – and these are people working in jobs that kept society going during the pandemic like social care workers and cleaners.
“We know that the Living Wage is good for businesses as well as workers, and as we rebuild our economy post pandemic, the real Living Wage must be at its heart.”
The Living Wage Foundation said more than 300,000 workers are set for a pay increase, including those at firms that have recently become accredited employers, such as Taylor Wimpey, Persimmon Homes, Fujitsu, Getir and Capita.
It claimed that a full-time worker earning the new, real Living Wage would earn £1,930 a year more than a worker earning the current government minimum. In London, the gap is £4,173 a year.
Sarah Wadsworth, UK HR director at Fujitsu, said becoming a Living Wage employer was the “right thing to do for our employees but also ensures that our suppliers and partners are also planning to align to this for their employees”.
“Fair pay for all employees continues to be relevant for our business as well as the benefits it brings to wider communities,” she said.
Fair pay for all employees continues to be relevant for our business as well as the benefits it brings to wider communities” – Sarah Wadsworth, Fujitsu
Anne Billson-Ross, Taylor Wimpey group HR director, said: “This voluntary commitment is a fantastic example of the direct action we are taking to ensure we remain an employer of choice, committed to do the right thing by our employees, suppliers and subcontractors.”
The new rates were announced as the Foundation published analysis that showed 17.1% of employee jobs are still paid less than the real Living Wage, rising to 21.3% in Northern Ireland and 20.2% in the East Midlands.
This was a significant decrease from the 20.2% of employee jobs that were paid below the Living Wage in 2020.
People from ethnic minority backgrounds were more likely to be low paid, with 19.4% of these workers earning below the Living Wage, compared to 16.3% of white workers.
A fifth of jobs held by women were paid below the Living Wage, compared to 13.9% of jobs held by men.
In his budget last month chancellor Rishi Sunak announced the new national minimum wage and national living wage rates that apply from 1 April 2022.