Real London living wage rises to £13.85 - this is what you need to know

Both the UK and London real living wages have risen, it has been announced.

The real London living wage has increased to £13.85 and the UK wage has risen to £12.60. This accounts for an extra 70p per hour in London (a 5.3% increase) and 60p (5% increase) in the UK respectively.

This will result in a pay rise for almost half a million British workers so they can continue to meet their everyday needs.

Recent research by the Living Wage Foundation shows that despite inflation easing, many of Britain’s 3.7m low paid workers are still struggling with the impact of years of high prices, with 42% having less than £10 left each week after covering essential expenses, 39% having used a food bank in the past year and 32% have skipped meals for financial reasons.

The real Living Wage is the only UK wage rate independently calculated based solely on the actual cost of living and is different from the government's National Living Wage, which is the legal minimum employers must pay for over-21s.

‘A welcome pay boost’

Mayor of London, Sadiq Khan posted on X: “The number of employers paying the London Living Wage has increased six-fold since I was elected, and this increase of over 5% will provide a welcome pay boost to more than 140,000 Londoners.”

The new real Living Wage rates are now worth over £2,262 more per year in the UK than the legal minimum, and over £4,700 more in London.

What’s the difference between the living wage and the real living wage?

The real Living Wage is different to the government’s minimum wage rate, which for those over the age of 21 is often called the “National Living Wage”. It is a higher, voluntary rate that is independently calculated based solely on the actual cost of living. The Government’s rate is the legal minimum businesses are required to pay by law.

The real Living Wage applies to all workers over the age of 18 working for a Living Wage Employer and is £12.60 an hour. The ‘National Living Wage’ applies to those over the age of 21 and is worth £11.44 an hour.

Who is eligible for the London living wage?

The London Living Wage is not legally mandated. Employers who choose to pay the LLW do so voluntarily. It applies only to employees of companies and organizations that have committed to paying it.

To be eligible, a worker must be employed by an organization that has voluntarily opted into the Living Wage Foundation’s scheme and become an accredited Living Wage Employer. Such organisations commit to paying all their workers the London Living Wage, including subcontracted staff (e.g., cleaners, security personnel).

Both full-time and part-time employees, as well as those on temporary contracts, are eligible if their employer is a Living Wage accredited company. This applies regardless of age, unlike the government's National Minimum Wage and National Living Wage, which have age brackets.

Some public sector bodies, like certain local councils, have also adopted the London Living Wage for their employees and contracted staff, even though it’s not a statutory requirement.

Real living wage hits major milestone

Katherine Chapman, Living Wage Foundation Director, said: “Low paid workers have been hardest hit by the cost-of-living crisis and are still struggling to stay afloat amidst persistently high prices.

“The real Living Wage remains the only UK wage rate calculated based on actual living costs, and the new rates announced today will make a massive difference to almost half a million workers who will see their pay increase.

“It's a challenging time for businesses too, which is why it is so encouraging to see the Living Wage movement continue to grow at pace. This year, we reached the major milestone of 15,000 accredited Living Wage Employers - with half of them signing up since 2021.

“Employers who want to go beyond the Government’s minimum wage and ensure their workers are paid in line with the real cost of living can look to these leading employers and accredit with the Living Wage Foundation.”