What is the Real Living Wage?

real living wage 2022

The Real Living Wage is a voluntary wage rate based on the cost of living. The rate is currently £12 across the UK and £13.15 in London. This is compared to the national minimum wage set by the government which is currently £10.42.


According to the Living Wage Foundation, around 11,000 businesses have pledged to pay all their employees the rate they have calculated. We are proud to say that we are now accredited. It’s important for us to pay employees a salary that they deserve that also meets everyday needs.


The new rate was announced on 24th October 2023. Employers have up until 1st May 2024 to make this change to remain a real living wage employer. This means that around half a million workers yearly salary will be £3,000 a year above the Government’s minimum wage. 


 The Living Wage Foundation has released polling results that show 60% of staff earning below the real living wage had visited a food bank in the last year. They also found that 39% skipped meals on a regular basis for financial reasons.  

This is a difficult time for many employees. They are being faced with rising living costs across the board including energy bills and mortgage rates. It’s important that you support your employees during this time and at least pay them a salary that covers their basic needs.


The Difference between the real living wage and the national living wage

The real living wage (RLW) is independently calculated and also based on goods and services people need to live. In contrast, the national living wage (NLW) was introduced in April 2016 by the Government and is based on a percentage of medium earnings. A target has been set to reach 66% of median earnings by 2024. Unlike the RLW, the NLW is statutory. 


The RWL applies to staff who are 18 or over. The NLW is available to staff who are 23 years and older. The Government originally made the NLW available to over 25’s as they claimed they are more likely to face changing financial circumstances and in work poverty. From 2021, it now applies to 23 years and older. However, The Living Wage Foundation believes that if people aged 18 years and over were payed the same, it would make it less impossible for them to get on the property ladder.


The final difference is that the foundation takes in to account the higher cost of living in London and has set the recommended rate for this area as £13.15. The Government has not applied a higher rate for London. The Government national rate is currently £10.42 UK wide.


What are the benefits?

There are many benefits that come with offering your staff the Real Living Wage. According to The LW Foundation, 93% of employers have benefited since accrediting. Other successes include:


  • 86% say it has improved their business reputation.
  • 75% claimed it has also improved motivation and retention rates.
  • 64% say it helped them stand out from other businesses.
  • 58% it improved relationships between managers and staff.


We have been accredited employers since last year. We were always paying our staff the living wage. However, it was important to us to become accredited to lead by example and also show future employees that their wellbeing matters to us.


How to Become a Living Wage Employer

You can join the club by registering on the real Living Wage Foundation website. You need to show that you pay the recommended rate to all directly employed staff, have a plan to pay contractors this rate, and also complete the application form on their website.


Once you are accredited you will:


  • Appear on their website and searchable map
  • access to guidance on implementing the RLW through procurement
  • Use the official logo on your website
  • National week pack with materials and guidance
  • Stay up to date with their regular newsletter
  • + more


In Conclusion

Becoming accredited shows public commitment to fair pay and shows you care about your employees. The cost of living crisis is putting a financial strain on most people and offering a fair wage will help to tackle this. We understand this is a difficult time for businesses too. However, it’s important to remember your staff are the ones who will get you through this.


Contact Us

If you would like help becoming a Real Living Wage employer, feel free to contact our outsourced HR Consultants.

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