What is the real living wage and should you be paying it?

Working out how to live on the living wage

As an employer, are you paying the real living wage? In April 2016 the government introduced a higher minimum wage rate for all staff over 25 years of age inspired by the Living Wage campaign – called the ‘national living wage’. However, the government’s national living wage is not calculated according to what employees and their families need to live. So, what is the real living wage?


What is the real living wage?

According to the charity, The Living Wage Foundation, the real living wage is based on the actual cost of living and is voluntarily paid by over 5,000 UK employers.

Currently, the national living wage is £8.21 per hour for over 25’s. However, The Living Foundation is encouraging employers to pay their staff over the age of 18 the real living wage, which they calculate to be £9.00 per hour across the UK and £10.55 in London.

The real living wage rates are higher because they are independently calculated based on what people need to get by to meet the actual cost of living. You can learn more about how the rates are calculated on The Living Wage Foundation’s website.


Benefits for employers

  • 86% of businesses that pay the real living wage reported that it enhanced their general reputation.
  • 80% of employers saw an increase in the quality of work carried out by their employees.
  • 75% say it has increased motivation and retention rates for employees.

The Living Wage Foundation has numerous case studies from companies who are paying the real living wage on their website so you can understand what the benefits might be for your business.


The difference it makes

According to The Living Wage Foundation, receiving the real living wage has enabled people to:

  • Spend more quality time with their children
  • Save a little for an emergency or rainy day
  • Not having to worry about affording the basics

It could make all the difference to your employees’ quality of life and also being able to meet their financial obligations on a regular basis. The Living Wage Foundation believe that by paying the real living wage, employers are voluntarily taking a stand to ensure their employees can earn a wage which is enough to live on.


How to become a real living wage employer

  • Pay the real living wage to all your directly employed staff
  • Have a plan to pay your contractors a living wage

You can also opt to become accredited by The Living Wage Foundation, which starts from £60 a year for businesses with less than 10 employees. You can learn more about the benefits of accreditation on their website.


You can get more information in The Living Wage Foundation’s FAQ here.


Further information

If you found this information useful, you may also want to check out the following:


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