The Living Wage Foundation's recent announcement about an increased real Living Wage has implications for UK employers.
Starting from 2023/24, the real Living Wage is set at £12 for the UK and £13.15 for London. Living Wage employers have a six-month grace period until 1 May 2024 to implement these new rates.
The real Living Wage is different from the Government's National Living Wage (NLW), which is currently £10.42 for individuals aged 23 and over. It's calculated independently based on the basic cost of living in the UK, applies to all individuals over 18, and employers voluntarily opt to pay this wage.
The key points from this announcement include a 10% increase in the real Living Wage, aimed at easing the financial burdens faced by low-paid workers.
This increase will benefit over 460,000 Living Wage workers, thanks to the 14,000 Living Wage employers who have pledged to pay the new rates.
Compared to the minimum wage, employees who are paid the new real Living Wage rates will see a significant income increase, with over £3,000 more per year in the UK and over £5,000 more in London. Notably, this initiative has channelled £3 billion in extra wages to low-paid workers since 2011.
In light of these wage adjustments, it is crucial for employers to consider the well-being of their workforce and address the challenges these changes may pose.
Katherine Chapman, Living Wage Foundation director, said:
"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."
Talk to us about your business.