As of today (3 November 2014), the UK Living Wage has been set at £7.85 per hour, benefitting 35,000 low-paid workers across the country who are employed by more than 1,000 Living Wage accredited organisations.
The new rate an increase of 2.6 per cent on the 2013 rate is 21 per cent higher than the national minimum wage of £6.50 per hour. The Living Wage rate for London has been set at £9.15.
Rhys Moore, director, Living Wage Foundation said:
“As the recovery continues it’s vital that the proceeds of growth are properly shared. It’s not enough to simply hope for the best. It will take concerted action by employers, government and civil society to raise the wages of the five million workers who earn less than the Living Wage.
“The good news is that the number of accredited Living Wage employers has more than doubled this year – over 1,000 employers across the UK have signed up. In the last 12 months the number of Living Wage employers in the FSTE 100 has risen from four to 18 including Canary Wharf Group and Standard Life.
“Low pay costs the taxpayer money – firms that pay the minimum wage are seeing their workers’ pay topped up through the benefits system. So it’s right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process.
“The Living Wage is an independent calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay.”
The rate announcement coincides with research released by KPMG, one of the Living Wage Foundation’s principal partners, which revealed that 5.28 million UK workers are being paid less than the Living Wage, with large numbers of employees working in the retail, catering and care sectors, clustered around minimum wage pay levels.
Mike Kelly, head of Living Wage, KPMG said:
“Far too many UK employees are stuck in the spiral of low pay. The research identifies statistics and trends, but it also reports the concerns of people earning below the Living Wage who expect their finances to worsen during the next 12 months and shows that debt levels have continued to rise among this group.
“Unless wages rise, a significant sector of the UK population will see themselves caught between the desire to contribute to society and the inability to afford to do so.
“Business benefits of the Living Wage include higher retention and productivity, and over 1,000 responsible businesses recognise this. The Living Wage may not be possible for every business, but is certainly not impossible to explore the feasibility of paying it.”
The Living Wage is calculated by the Centre for Research in Social Policy, Loughborough University, whilst in London, the rate is set by the Greater London Authority and is based on a combination of a basic living costs approach and income distribution, with respect to a variety of household types which takes account the unique circumstances of living in London.
Employers choose to pay the Living Wage on a voluntary basis.