The Chancellor, Philip Hammond, announced an increase in the National Living Wage in the 2018 Budget.
2018 Budget: National Living Wage Increase
The National Living Wage will increase from £7.83 per hour to £8.21 per hour from April 2019. In percentage terms, this represents a 4.9% increase in the National Living Wage, and a real terms increase which is well above the current rate of inflation. It will provide around 2.4 million workers with a pay rise from April 2019, and it equates to an approximate increase of £690.00 per annum for a full-time employee. The Government’s objective is that the Nationalo Living Wage rises to at least £9.00 per hour by 2020, and to at least 60% of median earnings by 2020.
Living Wage Foundation (LWF)
The charity, the Living Wage Foundation (LWF), calculates what it considers to be the “Real Living Wage” annually in November each year, and the rates that it has calculated are consistently higher than the National Living Wage. Nevertheless, despite that, over 3600 employers nationally (including some banks, NHS trusts, and local authorities) voluntarily adhere to the rates set by the Living Wage Foundation. The new rates for the “Real Living Wage” are scheduled to be announced during Living Wage Week, which is due to take place between the 5th November 2018 – 10th November 2018. The new rates for the “Real Living Wage” are likely to be significantly higher than the new rates for the National Living Wage set in the 2018 Budget.
The 3600+ employers who adhere to the Living Wage Foundations “Real Living Wage” include around a third of FTSE 100 companies, who employ around 150,000 people.
Last year, the Living Wage Foundation published a report which found that a third of those who were paid less than the “Real Living Wage” regularly skipped meals in order to economise. At the time of publication of the report, Katherine Chapman, the director of the Living Wage Foundation stated: “This is the sad reality of life for people who are in working poverty in the UK. We’ve seen the increasing use of food banks and other worrying trends. That’s why it’s more important than ever that employers are showing leadership and standing up and making a public commitment to paying the [real] living wage.“