Business

'Real living wage' rises in pre-Christmas pay bump

Woman cleaning Image copyright Getty Images

Thousands of UK workers will enjoy a pre-Christmas pay bump if their employer is a member of the "real living wage" campaign.

Businesses who have signed up to the voluntary scheme will lift their UK hourly rate by 30p to £9.30.

People living in London will see their hourly pay rise by 20p to £10.75.

The scheme is separate to the statutory National Living Wage for workers aged 25 and above which currently stands at £8.21 an hour.

The Living Wage Foundation said its "real" pay rate - which applies to all employees over 18 - is calculated independently and is based on costs such as food, clothing and household bills.

Some 6,000 organisations are now signed up to the scheme, including new members Crystal Palace Football Club, insurer Hiscox, Welsh Water and London City Airport.

They join existing members such as Burberry, the luxury fashion company, and West Ham United Football Club.

The Living Wage Foundation said around 210,000 workers will benefit from the increase.

Image copyright Getty Images
Image caption Crystal Palace Football Club is one of the latest organisations promising to pay the "real living wage"

New research by accountancy firm KPMG suggests that the number of UK jobs paying less than the "real living wage" has fallen over the past year from 22% to 19%.

However, it said 5.2 million jobs pay below the "real" living rate.

The National Living Wage is a key campaign issue as the UK heads towards the general election on 12 December.

An independent report, commissioned by the former Chancellor Philip Hammond, concluded that raising the National Living Wage would have little impact on jobs.


National Living Wage v real living wage

  • The National Living Wage is the legally binding hourly rate for workers aged 25 and over. It was set at £8.21 an hour in April 2019 and is reviewed every year just like the National Minimum Wage (for under 25s).
  • The real living wage was devised by charity the Living Wage Foundation. It argues the government's National Living Wage is not high enough to meet workers' needs and encourages employers to adopt to its more generous, independently calculated rate.

The Conservative Party has promised to increase the National Living Wage to £10.40 by 2024 and to lower the minimum age to 21.

Labour said it will immediately lift the hourly rate to £10 for everyone aged 16 and over if they win the election.

Under the current arrangement, workers under 18 are paid £4.35 an hour.

At the weekend, SNP leader Nicola Sturgeon accused the Tories of short-changing young people with a "discriminatory" minimum wage policy.

She said the SNP will demand an end to the "rip-off" of workers aged under 25.

Katherine Chapman, director of the Living Wage Foundation, said while it is "fantastic" there is so much focus on wages: "We have always been working with businesses to take action now rather than waiting for legislation."

Pam Batty, vice president of corporate responsibility at Burberry, said: "We are calling on all companies to join the pledge, as we know it will meaningfully improve the lives of their people, who are their most valuable asset."

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