What is the London Living Wage? Sadiq Khan announces 10% pay rise for thousands of Londoners

The mayor of London Sadiq Khan has announced 130,000 people are to benefit as the London Living Wage is increased by 10%. But what is the London Living Wage, and what does a 10% boost mean in reality?

Across the UK, the government sets a minimum wage, known as the National Living Wage, which details what those over 23 should be paid. Currently sitting at £10.42 an hour, it is legally binding that most workers to be paid this as a minimum by their employers.

Separately, there is the real Living Wage. Set by the Living Wage Foundation, it is independently calculated based on living costs and applies to everyone over 18. While not a legal obligation, companies are invited to sign up, with touted benefits including a reduction in absenteeism and staff morale. Since 2011, 460,000 workers at 14,000 organisations are predicted to have benefited.

The London Living Wage, also managed by the Living Wage Foundation, is an extension of this, set higher due to the cost of living in the capital. Backed by City Hall, more than 3,500 employers, from major corporations such as Aviva and the London Stadium to small businesses, have signed up, with 130,000-plus Londoners expected to see a bump in their income due to the recent uplift.

What has the London Living Wage been increased to?

The latest 10% boost to the London Living Wage takes it from £11.95 to £13.15 an hour. According to City Hall, this means a full-time worker on the new wage would earn £5,323.50 more per year than someone on the National Living Wage, and £2,145 more than they were on prior to the uplift.

The Living Wage across the rest of the UK meanwhile has been hiked by £1.10, up to £12 per hour.

Katherine Chapman, director of the Living Wage Foundation, said: “As inflation eases, we cannot forget that low paid workers remain at the sharp end of the cost-of-living crisis. Low paid workers continue to struggle with stubbornly high prices because they spend a larger share of their budget on food and energy. These new real Living Wage rates are a lifeline for the 460,000 workers who will get a pay rise.

“During these tough economic times, it is heartening that record numbers of employers are signing up to join the Living Wage movement, protecting everyone who works for them – including cleaners -from rising prices and seeing the benefits of a more motivated and engaged workforce. 

“The real Living Wage has never been more important, and we encourage those who can to join the 14,000 Living Wage employers across the UK who are committed to always pay a wage that covers the cost of living.”

‘A better and more prosperous city for all Londoners’

Commenting on the increase to the London Living Wage, Mr Khan said he is proud those employers who have signed up recognise the importance and benefits of paying Londoners “a fair wage”.

He added the London Living Wage has risen by 40% since he was elected in 2016, and that this year’s 10% is the biggest jump yet.

“I am especially proud to announce today that the Greater London Authority (GLA) is taking this to the next level as a “Living Hours” employer,” he said. “This means that not only are people paid at or above the LLW, but they have at least 16 hours of work each week if they want, and more notice about the shifts they work. 

“Changes like this combine the security of fair pay with a regular and reliable wage so we can build a better and more prosperous city for all Londoners.”

Graham Gilmore, chief executive at the London Stadium, said: “With everyday living costs continuing to rise, the annual review of the London living wage is incredibly important to many people that work at our Stadium.

"Alongside all other employers at our venue and many across Queen Elizabeth Olympic Park, we are committed to supporting all causal and permanent staff at a time when it matters most.”