The ‘real’ Living Wage as recommended by the Living Wage Foundation has increased by 5% to £12.60 an hour.
This means that almost 500,000 workers across more than 15,000 businesses who are signed up to pay the voluntary rate will receive £2,262 a year more per year in the UK than if they were on the statutory minimum rate.
In London, the rate has increased by 5.3% to £13.85 an hour, meaning workers at employers signed up to the scheme will earn over £4,700 more per year.
Living Wage rate 2024-25
Last year, the rates increased by 10% for the second year running, pushed up by high inflation and living costs.
The current national living wage, set by the government, applies only to those over the age of 21 and is worth £11.44 an hour. The Living Wage is available to workers over the age of 18 who work for a Living Wage employer.
The government has pledged to abolish the lower statutory minimum rate for 18- to 20-year-olds and has suggested the Low Pay Commission gradually closes the gap “year by year”.
Earlier this month, the Living Wage Foundation shared research showing that 42% of workers who earn below the ‘real’ Living Wage have less than £10 a week left after paying their bills, rent and transport costs.
However, the latest data from Brightmine shows that employers are still cautious about offering higher pay rises, with the median pay award forecast to drop to 3% in 2025.
And while the number of employers signed up to the scheme has grown, this year has seen a handful of high-profile organisations withdraw from the Living Wage, including BrewDog and Capita.
Katherine Chapman, Living Wage Foundation director, said the new rates would make a “massive difference” to people struggling with the cost of living.
“It’s a challenging time for businesses too, which is why it is so encouraging to see the Living Wage movement continue to grow at pace,” she said.
“Employers who want to go beyond the government’s minimum wage and ensure their workers are paid in line with the real cost of living can look to these leading employers and accredit with the Living Wage Foundation.”
A number of employers have also signed up to the foundation’s Living Hours scheme, which guarantees a minimum of 16 hours per week alongside a month’s notice of shift patterns and a contract that reflects the hours they have worked; and the Living Pension scheme, which recommends a minimum of 7% employer contribution into workers’ retirement.
Darren Taylor, country people and culture manager at IKEA UK&IE, said of the new Living Wage rate: “We hope this year’s uplift, along with our enhanced flexibility and benefits offer, will provide co-workers’ with greater financial stability and the support needed to live a better everyday life.”
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