MSE News

'Real living wage' to rise to £9 an hour

Around 180,000 workers employed by firms which offer the 'real living wage' will see their pay increase by 25p an hour, or 30p an hour in London. 

The real living wage is calculated by the Living Wage Foundation charity, based on what it believes people need to live in the UK. It's separate to the national minimum wage, which is a legal minimum rate set by the Government, and will also be rising next April.

The real living wage is to rise from £8.75 to £9 an hour, while the London rate will be rising from £10.20 to £10.55 an hour – a pay rise of 2.9%, and 3.4% for London workers.

Employers who already offer the real living wage will have until May 2019 to bring in the pay rise, though many are expected to do it immediately – employers who sign up to the scheme from today will need to pay all directly employed workers at least £9 an hour straight away. 

The Living Wage Foundation says the wage is going up due to hikes in council tax and transport and rent costs. The higher London rate reflects the increased costs of living in the capital.

What is the real living wage?

Employers can voluntarily sign up to become living wage-accredited, meaning they pay all their workers at least the real living wage.

Over 4,700 employers have signed up, including 1,200 in the last year alone. However, there are still many who haven't – research from accountancy firm KPMG published yesterday found over a fifth of jobs pay less than the real living wage.

Here's how the real living wage compares to the national minimum rates set by the Government:

How minimum and living wages compare (hourly rates)

TABLE_CELL_STYLE Real living wage Real living wage (in London) National living wage (1) National minimum wage (2)
Ages All All 25+ 21-24 18-20 Under 18 Apprentice
Current rate £8.75 £10.20 £7.83 £7.38 £5.90 £4.20 £3.70
New rate (2) £9 £10.55 £8.21 £7.70 £6.15 £4.35 £3.90

(1) The Government calls the minimum wage for over 24’s the ‘national living wage’. We don’t use that term, as it is not based on assessment of the cost of living. See our National minimum wage guide for more. (2) From April 2019 for the national living wage and minimum wages, and May 2019 for the real living wage (although many employers could raise it sooner).

What does the Living Wage Foundation say?

Living Wage Foundation director Tess Janning said: "The Living Wage campaign is about tackling the rising problem of people paid less than they need to live.

"Responsible businesses know that the Government minimum is not enough to live on, and today's new living wage rates will provide a boost for hundreds of thousands of workers throughout the UK.

"Employers that pay the real living wage enable their workers to live a life of dignity, supporting them to pay off debts and meet the pressures of rising bills.

"We want to see local councils, universities, football clubs, bus companies and the other major public and private sector employers in every city commit to become real living wage employers. When they do, thousands of people get a pay rise, but other local employers also follow their lead. If more of these institutions step up, we can start to build true living wage places."

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