'Real living wage' rises to £9.90/hr

Under the changes, workers whose employers pay the real living wage will now earn the following rates, although employers have up to six months to implement the changes:

• Across the UK (other than London) – the real living wage rate has risen by 40p/hour, from £9.50/hr to £9.90/hr.

• In London, the real living wage has risen by 20p/hr, from £10.85/hr to £11.05/hr.

The real living wage is an hourly rate of pay calculated by the Living Wage Foundation charity based on what people need to live on to pay for costs including fuel, energy, rent and food. It's paid voluntarily by almost 9,000 UK employers, but it's separate to the national minimum wage rates, which are the legal minimum rates set by the Government (see more on this below).

To find out how much of your salary you'll take home after tax, see our Tax rates 2021/22 guide, and use our Income Tax Calculator.

How the real living wage compares to the Government's national minimum wage

The Government announced last month that the national minimum wage paid to workers aged 23 and over will rise from £8.91/hr to £9.50/hr from 1 April 2022. This represents an increase of 59p, and an extra £1,000/year if you work full-time. The national minimum wage for workers aged under 23 and apprentices will also rise.

But the Real Living Wage Foundation says a full-time worker earning the real living wage would earn £1,930/yr more than someone on the current Government minimum wage for workers aged 23 and over. Even when next April's higher national minimum wage rate of £9.50 comes in, a full-time worker on the real living wage would earn £780/yr more, according to the charity.

In London meanwhile, the charity says a full-time worker on the new real living wage rate would earn an additional £4,173/yr compared to a worker on the current national minimum wage, and £3,022/yr more than a worker on the national living wage from April 2022.