REAL LIVING WAGE INCREASES TO £9.90 IN UK AND £11.05 IN LONDON AS COST OF LIVING RISES.

  • Over 300,000 Living Wage workers are set for a pay boost
  • More than £1.6 billion in extra wages has gone to low-paid workers since the start of the Living Wage movement 20 years ago
  • £613 million in extra wages has gone to low-paid workers since the start of lockdown, with a record number of employers signing up – over 3,000 since the pandemic began
  • 4.8 million employees (1 in 6 workers) are still paid below the Living Wage, with those from racialised groups1 more likely to be paid below the Living Wage than white workers (19.4% compared to 16.3%).

Living Wage and London Living Wage Rise

Over 300,000 people working for almost 9,000 real Living Wage Employers throughout the UK are set for a pay boost as the new Living Wage rates rise to £9.90 across the UK (40p increase), and £11.05 in London (20p increase), supporting workers and families.

The Living Wage rates are the only rates independently calculated based on what people need to live on.

Living Wage employers have from now until 14th May 2022 to apply the rise.

Living Wage and the ‘National Living Wage’ – what’s the difference?

Unlike the Government minimum wage (‘National Living Wage’ for over 23s – £8.91 rising to £9.50 in April) the real Living Wage is the only wage rate independently calculated based on rising living costs including fuel, energy, rent and food.

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 (NLW). That’s the equivalent of 7 months food bills and more than 5 months’ rent based on average household spending in the UK. Even with next April’s higher NLW rate of £9.50, a full-time worker on the real Living Wage would earn £780 more.

In London, a full-time worker on the uplifted real Living Wage rate would earn an additional £4,173 a year compared to a worker on the current NLW and £3,022 more than a worker on the April 2022 National Living Wage.

Living Wage Week

Living Wage Week, is from 15th-21st November 2021, and is a UK-wide celebration of the (almost) 9,000 employers that have voluntarily committed to ensure employees and sub-contracted staff earn a real Living Wage. This includes half of the FTSE 100 and major household names such as Everton FC, Aviva, Burberry, and Nationwide.

Living Wage Movement

The movement continues to grow with new additional employers announced at the start of Living Wage Week, these, include FTSE 100 construction firms Taylor Wimpey and Persimmon Homes, Fujitsu, food delivery company Getir, and Capita. They join half of the FTSE 100 companies, household names like Aviva, Everton FC, Burberry and Lush as well as thousands of small businesses, who are choosing to pay the real Living Wage to ensure all staff earn a wage that meets the real cost of living.

More than 3,000 employers have now accredited with the Living Wage Foundation since the start of the pandemic.

The Metro Mayors in London and Greater Manchester have also announced major new commitments to create Living Wage City Regions which could see a thousands more pay rises.

Globally, the Living Wage campaign also launches the Living Wage for the United States, the first coordinated national effort set up to ensure that workers across the US are paid a real Living Wage.

Low pay in the UK  

The announcement of the new rates comes as new research by the Living Wage Foundation has demonstrated the scale of low pay during the pandemic, with 4.8 million jobs (17.1% of employee jobs) still paying less than the real Living Wage.

Northern Ireland had the highest proportion of jobs paying below the Living Wage (21.3% or 236,000) and the South East the lowest (12.8% or 533,000).

Racialised groups were more likely to be low paid – with 19.4% earning below the Living Wage compared to 16.3% of white workers.

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 Archbishop of York, the Most Revd Stephen Cottrell, said:

“This Living Wage Week, the Living Wage Foundation has announced the new rates that cover what we all need to earn to get by. Their movement will see over 9,000 businesses elect to give their 300,000 workers not only what they need to survive, but to thrive as well.

The principle behind the campaign for better pay and secure working conditions ought to be a pillar of our new society, and one I hope will be adopted by even more forward-thinking businesses as we look ahead to 2022.”

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.” 

Kim Coles, Finance Director at Lush, said: 

“At Lush we are committed to a fair wage at all levels of the business and fully support the UK Living Wage Foundation’s approach of a hard day’s work deserving a fair day’s pay. We have been paying the London Living Wage since 2011 and paying all UK staff at or above the “real” hourly Living Wage rate since April 2017. We continue to commit to the rate in tough times because that is when our people need it the most, and it’s the right thing to do. Lush staff are crucial to our success, and they work incredibly hard making and selling our products. Having an independently calculated real living wage rate means that we have a positive step towards staff being able to afford what they need to thrive, not just survive. It also means that the same fair trade commitment we make to our ingredient suppliers is made to our staff and that we can be confident their rates of pay are fair and increase in line with real living costs.”   

A word of caution

It is still possible for an employer who pays the Living Wage to be in breach of the government National Minimum Wage laws as the basis of qualifying and payment are different. Living Wage is about the rate of pay paid, whereas the National Minimum Wage and National Living Wage are about the pay received across the amount of time worked.

PAYadvice.UK 15/11/2021

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