Over 500,000 workers at more than 15,000 businesses will see their hourly wage increase to at least £12.60, following a 5% adjustment announced by the Living Wage Foundation.
In London, employees will experience an even greater pay boost of 6%, bringing their hourly wage to £13.85, as per the charity’s statement.
These new rates stand in contrast to the national minimum wage for adults aged 21 and over, which currently sits at £11.44 per hour and is received by approximately 1.6 million individuals. The Living Wage Foundation’s calculated “real living wage” offers an annual benefit of £2,262 more than the statutory minimum for workers outside of London, and a substantial £4,700 additional for those within the city.
A notable half of all FTSE 100 companies have pledged to adhere to this voluntary pay initiative, including brands such as Burberry, Ikea, Lush, and Everton Football Club. The adoption of these pay standards has proliferated, with the number of businesses participating rising from 7,713 in 2021 to 15,586 this year. Small and medium-sized enterprises now account for 91% of all businesses signed up, an increase from 87% in 2021.
Recent studies from the charity highlight the struggles of many of Britain’s 3.7 million low-paid workers, revealing that 42% have less than £10 remaining each week after meeting essential costs.
Katherine Chapman, a director at the charity, recognized the challenges faced by businesses in managing rising costs but expressed optimism regarding the continuous increase in employer participation.
“The real living wage remains the sole UK wage standard calculated on actual living expenses, and these adjusted rates will significantly benefit nearly half a million workers whose income will rise,” she stated.
Employers will have a six-month timeframe to implement these new pay rates. Jean-Sébastien Pelland, executive director of Eland Cables in South Yorkshire, announced that the company would retroactively adjust pay for all 260 employees to reflect the new rate starting from October.
“We continue to support the living wage because it is fundamentally right, aligning with our moral and commercial responsibilities to retain and support the key staff driving our business,” Pelland remarked.
The Low Pay Commission, appointed by the government, projects a 5.8% increase in the statutory minimum wage for those aged 21 and over, recommending a new hourly rate of £12.10 effective next April. Additionally, it is likely to recommend a greater increase for workers aged 18 to 20 as part of its efforts to narrow the disparity between these younger workers and adults. A formal announcement confirming these rates is expected at the end of October.