Almost half a million workers are to receive a pay boost after it was announced that the real living wage paid voluntarily by 16,000 UK companies will rise to £13.45 an hour in April.
Distinct from the national living wage, which is a statutory minimum, the real living wage is calculated each year based on the cost of essentials, and is paid by more than half of the companies in the FTSE 100.
Born from a long-running campaign about the difficulties of making ends meet on poverty pay, employers can agree to pay the more generous rate. The Japanese clothing store Uniqlo, the University of Salford and Truro city council are among the latest to sign up.
The real living wage will rise to £13.45 an hour nationwide from April – an increase of 85p an hour, or 6.7%. In London, it will go up 95p, or 6.9%, to £14.80 an hour.
Recent research by the Living Wage Foundation, which calculates the rates each year, found that 42% of the UK’s low-paid workers had resorted to using food banks over the last 12 months.
Katherine Chapman, the foundation’s executive director, said: “The new rates announced today will make a massive difference to workers and their families, helping them to better cope with the costs of rent, bills, food and other essentials, and to live with stability and security.”
The national living wage – as the minimum wage was rebranded by George Osborne – has also risen significantly in recent years. It is expected to be set at around £12.71 from April but the independent Low Pay Commission has not yet made its final recommendation to the chancellor, Rachel Reeves, on the issue.
The government’s minimum wage also only applies in full to over-21s, whereas real living wage employers promise to pay it to everyone over 18.
Some firms go further and agree to become a “living hours” employer, promising at least 16 hours work a week, a month’s notice of shift patterns and a contract that reflects hours worked – all concerns that emerged from research among low-paid workers.
Chapman added: “Despite the challenges businesses face, our movement continues to grow, with over 16,000 employers now accredited. These leading employers are showing that paying the real living wage has a far-reaching impact on staff, businesses and society.”
Matt Sparkes, sustainability director at the law firm Linklaters LLP, said: “We’ve paid the real living wage for over a decade, and we still hear from our people of the pride that it brings and the difference that it makes. Now, more than ever, it demonstrates a tangible commitment to fairness, respect and doing what is right.”
