Louisa Withers | 11 Nov 2020

Voluntary minimum rate rises to £9.50

The recommended level of the voluntary Living Wage rose on 9 November 2020 from £9.30 to £9.50 for staff outside London and from £10.75 to £10.85 in the capital.

The Living Wage, as recommended by the Living Wage Foundation , is an estimate of the minimum rate of pay required to meet a ‘socially acceptable’ standard of living. The rates are calculated annually by the Resolution Foundation[1] and are overseen by the Living Wage Commissionbased on the best available evidence about living standards in London and the UK.

The Living Wage differs from the Government's National Living Wage (NLW), which is the statutory minimum wage for workers aged 25 and over, and National Minimum Wage rates for younger workers and apprentices. The statutory minimum for workers aged 25+ is currently £8.72 and is due to be uprated from 1 April 2021, along with a reduction in the age at which staff qualify for the NLW from 25 presently to 23. It is due to fall further to 21 by 2024. Employers are legally required to ensure employees are paid at least the statutory minimum for their age under the National Minimum Wage Regulations, whereas the Living Wage is a recommended rate which employers can voluntarily choose to adopt – they may also opt to seek formal accreditation.

Research conducted by IDR at the end of 2019 with a sample of 137 organisations showed that 20% were accredited by the Living Wage Foundation, and that employers in the public and not-for-profit sectors are more likely to be accredited than those in the private services and manufacturing. At that time the Living Wage Foundation reported that there were 5,992 accredited employers in the UK; this has since risen to 6,935.

[1] A report detailing the methodology can be found here https://www.resolutionfoundation.org/publications/calculating-a-living-wage-for-london-and-the-rest-of-the-uk-3/