Living Wage increases

Living wage. The image shows a lot of five and twenty pound notes.

The Living Wage Foundation has announced that its voluntary UK real Living Wage has risen by 40p from £9.50 to £9.90 per hour. Its London real Living Wage has risen by 20p from £10.85 to £11.05 per hour. How do these rates compare to the mandatory national living and national minimum wage rates?​

The Foundation’s real Living Wage is an hourly rate which is updated annually each November and it’s calculated independently based on real rising living costs, including fuel, rent, energy and food. The new rates are £11.05 per hour for London and £9.90 per hour for the rest of the UK. It’s entirely voluntary, so you don’t have to pay it, but those employers that do can apply to become accredited real Living Wage employers. The number of accredited employers now stands at just over 9,000, and they must implement this pay rise for over 300,000 workers aged 18 and older as soon as possible and by no later than 15 May 2022. The increases this year have largely been driven by rising fuel and rent costs.

Conversely, the government’s statutory national living wage (NLW) and national minimum wage (NMW) are mandatory and the rate applicable depends on the worker’s age and there is no London weighting. The NLW and NMW rates will rise on 1 April 2022 as follows:

  • the NLW rate for workers aged 23 and over will rise from £8.91 to £9.50 per hour
  • the NMW rate for workers aged 21 and 22 will rise from £8.36 to £9.18 per hour
  • the NMW rate for workers aged 18 to 20 will rise from £6.56 to £6.83 per hour
  • the NMW rate for workers aged 16 and 17 will rise from £4.62 to £4.81 per hour
  • the NMW apprentice rate will rise from £4.30 to £4.81 per hour.

The NLW is based on a government target to reach two thirds of median earnings by 2024, not on the real cost of living.

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