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What is the Living Wage in the UK?

The Living Wage is voluntarily paid by employers. It takes into account the cost of living.

What is the Living Wage in the UK?

The Living Wage, also called ‘real living wage’ is calculated by the Living Wage Foundation, an independent body, taking into account the cost of living in different areas of the UK.

  • In London, it’s set at £10.55 per hour for employees aged 18 or over.
  • Outside of London, in the rest of the UK, it’s set at £9.00 per hour for employees aged 18 or over.

Companies can decide voluntarily to pay the Living Wage.


Who pays the Living Wage in the UK?

Close to 5,000 companies (4,996 precisely!) are accredited employers who opted to pay the living wage, including more than 1/3 of FTSE 100 companies.

You can search in the Living Wage Foundation’s Directory for accredited employers.

How is the Living Wage calculated?

Since 2016, the rates have been calculated annually by the Resolution Foundation, an independent think-tank focused on ‘improving the living standards of those on low to middle incomes’.

It’s overseen by the Living Wage Commission, a commission appointed by the Living Wage Foundation, with representatives from trade unions, Living Wage’s accredited employers and independent experts.

They take into account everyday living costs based on a basket of goods and their evolution year-on-year.

How to become a ‘Living Wage Employer’?

You need to fill-in an application form and pay the living wage to all your directly employed staff.

It costs £60 onwards to be accredited – it depends on the number of employees in your company.

According to the Foundation, it can take up to 6 months, for the larger organisations, to be accredited.

What’s the difference between the ‘Real’ Living Wage and the National Living Wage?

There are 4 main differences about the ‘Real’ Living Wage, the National Living Wage and the National Minimum Wage:

  • The hourly rate
  • Whether it is statutory or mandatory
  • The age from which it applies
  • The body that decides on the rate to be applied
National
Minimum Wage
National
Living Wage
Living Wage
How much?£7.38 / hr (UK)£7.83 / hr (UK)£9.00 / hr (UK outside
London)
£10.55 / hr (London)
Is it compulsory
by law?
YesYesNo – it’s voluntary
From what age?21 – 2425 and older18 and older
Who decides?UK governmentUK governmentLiving Wage Foundation

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