The voluntary Living Wage has risen today from £9.90 to £10.90 an hour outside London and from £11.05 to £11.95 in the capital – uplifts of 10.1% and 8.1% respectively. The increase takes the voluntary rate above the current statutory National Living Wage (NLW) of £9.50, though this is set to be updated from April and could rise to around £10.30. The new statutory floor should be announced before Christmas.
The rate calculated by the Living_Wage Foundation, sometimes known as the ‘real living wage’, is an independent estimate of the wage needed for a socially acceptable standard of living. The voluntary rate should be paid to all workers aged 18 and over.
This latest rise is the largest increase in the voluntary minimum and the announcement has been presented two months early by the Foundation in response to the steep rise in the cost of living. Accredited employers have been urged to implement the new rate as soon as possible but have until 14 May 2023 to pay the new rates to their workers.
The importance of the voluntary Living Wage has grown in recent years. There are now over 11,300 accredited living wage employers across the UK and this figure has almost doubled from around 6,000 in 2019. This group includes many household names such as BP, British Gas and HSBC.
This greater prominence is reflected in the results of a survey by IDR in the summer of 2022, which found that over a third (36%) of 121 mostly large employers surveyed considered increases to the voluntary Living Wage to be an ‘important’ or ‘very important’ factor when determining the outcome of their pay increases for the current year, 2022. However, a much greater proportion, around three-fifths (62%), said the same about increases to the statutory National Living/Minimum Wage.
