Outsourced Payroll Specialists

The Real Living Wage Increases by 2.9%

According to the Living Wage Foundation, the ‘real’ living wage has increased by 25p to £9 per hour across the UK, a rise of 2.9%. In London, the rate increased by 35p to £10.55 an hour according to mayor Sadiq Khan, a rise of 3.4%.

The bigger picture

There are now some 4700 employers across the UK who pay at least the Living Wage to their staff, including around 1500 employers in the capital. This increase means the rate is now £1.17 or 14.9% above the figure that the government has given for the minimum wage – the rate that everyone over 25 needs to be paid. This is known as the ‘national living wage’ or NLW. There is also the London Living Wage which is set at £2.72 or 34.7% higher than the NLW.

Director of the Living Wage Foundation, Tess Lanning, said that responsible businesses know that the minimum wage set by the government is not enough for staff to live on. The increase to the ‘real’ living wage will mean that hundreds of thousands of employees around the UK will be better off in their next pay packet.

Employees that earn the real Living Wage have a better chance of managing rising bills, the cost of food and to handle debts or housing costs.

Impact of the living wage movement

Research shows that employers around the UK have paid over £800 million in extra wages due to the Living Wage movement. In the last year alone, £200 million in extra wages have been awarded to staff due to the work it has done.

The Living Wage rates are calculated based on what people need to live around the UK and also in London. Driving factors for it including transportation costs, rents and council tax, all of which have increased in the last year.

There is also some belief that the foundation could help the government’s Low Pay Commission to ‘aspire to end low pay’ as set out by the recent budget from Chancellor Philip Hammond.

Increases to minimum wage

In the budget, the Chancellor announced that there would be an increase in the minimum wage in April 2019 to £8.21 an hour for over 25 year olds. This is also impacting the other lower wage brackets which will include £7.70 for 21-24 year olds down to £3.90 for apprentices. However, many experts believe that these lower brackets should be abolished and there should just be one minimum wage for everyone.

The AAT (Association of Accounting Technicians) say that considering one-third of their student population is under 25 and there are 10,000 studying apprenticeship schemes, it was in favour of the change. It describes the current apprenticeship wage of £3.70 as exploitive and believes apprenticeships should pay the full minimum wage.

A big life change

Employees who have benefited from an increase in wage due to the ‘real’ Living Wage have spoken on the difference it has made to their lives. And the Foundation is asking more companies to consider changing their wage structure in favour of this approach.

Trace Payroll is an expert when it comes to managed payroll and HR. To find out more about our dedicated service, get in touch using the details below.

Get in touch


To find out more about fully managed payroll outsourcing with a personal touch, contact Trace Payroll Services today.

Call Trace Payroll Services on 0845 873 5619