The Living Wage Foundation has announced that its voluntary real Living Wage has risen by 60p to £12.60 per hour and in London by 70p to £13.85 per hour. How do these rates compare to the government’s mandatory national living and national minimum wage rates?
The Living Wage Foundation’s real Living Wage is an hourly rate which is updated annually each autumn. It’s calculated independently based on the real cost of living in the UK, and a basket of household goods and services is used to calculate it. The new Living Wage rates are £13.85 per hour for London (which covers all boroughs in Greater London) and £12.60 per hour for the rest of the UK. It’s voluntary, so you don’t have to pay it if you don’t want to or can’t afford to, but those employers that do can apply to become accredited real Living Wage employers. There are now over 15,000 accredited Living Wage employers, and they must implement this pay rise for over 475,000 workers aged 18 and older as soon as possible and by no later than 1 May 2025.
Conversely, the government’s statutory national living wage (NLW) and national minimum wage (NMW) are compulsory and the rate applicable depends on the worker’s age and there is no London weighting. The current hourly rates of the NLW and NMW are as follows, but these are set to rise from 1 April 2025, with the new rates expected to be announced in the Budget on 30 October 2024:
NLW rate for workers aged 21 and over: £11.44
NMW rate for workers aged 18 to 20: £8.60
NMW rate for workers aged 16 and 17: £6.40
NMW apprentice rate: £6.40.
The government has said that, from April 2025, the NLW rate will, for the first time, take account of the cost of living, and the NMW rate for workers aged 18 to 20 will be set so as to narrow the gap with the NLW. The government’s ultimate ambition is for there to be a single adult NLW rate applying to all workers aged 18 and over.