Real living wage: are you about to get a pay rise?

Tens of thousands of workers are set to receive a pay rise as the UK’s “real living wage” increases to £9 an hour.

The newly announced hike comes as British households “face increasing pressure from higher living costs”, notes The Guardian. “Inflation rose sharply following the EU referendum in 2016 when the sudden fall in the value of the pound drove up the cost of importing goods to Britain,” says the newspaper.

So how do you know if you are about to be paid more?

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

What is the ‘real living wage’?

The campaign for a “living wage” was launched by community organising institution Citizens UK in 2001, and calls on businesses to pay more than the government’s minimum wage in order to ensure that workers can meet the real cost of living. The Treasury appeared to be taking heed of the demands with the introduction two years ago of a new higher rate of minimum wage for workers aged 25 and above, called the national living wage.

However, the Living Wage Foundation says the sums set are too low and continues to calculate its own “real living wage”, based on what people need to meet the costs of living, from food and clothing to housing, council tax, travel and childcare. More than 4,700 businesses have agreed to pay their employees this amount after signing up to the voluntary scheme.

The state’s national living wage, which is based on a target to reach 60% of median earnings by 2020, is currently £7.83. By contrast, the new real living wage is rising by 3.4% to £10.55 in London and by 2.9% to £9 for the rest of the country.

Which companies have signed up?

Businesses accredited by the foundation include about a third of the FTSE 100 and big names such as ITV, Google, Ikea, Everton FC and Chelsea FC. You can see if your employer is on the list at the Living Wage Foundation website. “About 180,000 employees will qualify for the pay rise,” says the BBC.

When will employees see their salaries boosted?

Employers have been advised to implement the rise as soon as possible. All employees should receive the new rate within six months, with a deadline of 1 May, says the foundation.

What if your company is not on the list?

All workers earning the government minimum will have to wait until April next year for a boost to their pay. The national living wage is due to rise to £8.21, while the minimum wage for workers aged 21 to 24 will rise from £7.38 to £7.70.