The new rates for the Real Living Wage and the London Living Wage have just been announced by the Living Wage Foundation.
Real Living Wage
The Real Living Wage has been increased by £1.10 per hour from £10.90 per hour to £12.00 per hour, an increase of 10.09%. Those employers who are signed up to the scheme are expected to implement the new rate by the 1st May 2024. The new rate of £12.00 per hour means that the Real Living Wage is now £1.58 per hour higher than the current rate of £10.42 per hour for the National Living Wage.
The new rate for the London Living Wage has also just been announced at the same time as the new rate for the Real Living Wage, with the new rate for the London Living Wage increasing by £1.20 per hour from £11.95 per hour to £13.15 per hour, an increase of 10.04%. Again, those employers who are signed up to the scheme are expected to implement the new rate by the 1st May 2024. Accordingly, the London Living Wage is now £2.73 per hour higher than the current rate for the National Living Wage.
For a full-time worker on the new rate for the Real Living Wage, they will earn £3,081.00 more a year than one who is on the current rate for the National Living Wage (i.e. earning £23,400.00 per annum on a 37.5 hour week, compared to £20,319.00). Those on the new rate for the London Living Wage, will earn £5,323.50 more per annum (i.e. earning £25,642.50 per annum on a 37.5 hour week, compared to £20,319.00)
The new rate for the Real Living Wage is usually announced in November each year. However, for the second year running, the announcement has been brought forward due to the cost of living crisis. Last year, the announcement was made on the 22nd September 2022, whilst this year it was brought forward to the 24th October 2023.
Currently, 3.5 million workers earn less than the Real Living Wage, which represents 12.2% of the workforce
Research recently published by the Living Wage Foundation found that 60% of those earning less than the Real Living Wage have used a food bank in the last year (with 43% using them at least once a month), 50% are worse off compared to a year ago, 39% are in financial arrears, and 39% have often abstained from meals
Commenting upon the increase in the Real Living Wage, the director of the Living Wage Foundation, Katherine Chapman, stated: "As inflation eases, we cannot forget that low paid workers remain at the sharp end of the cost of living crisis...These new real Living Wage rates are a lifeline for the 460,000 workers who will get a pay rise....The real Living Wage has never been more important and we encourage those who can to join the 14,000 Living Wage employers across the UK who are committed to always pay a wage that covers the cost of living."
National Living Wage
As we highlighted in a previous article, in a speech to the Conservative Party Conference on the 2nd October 2023, Jeremy Hunt, the Chancellor of the Exchequer, confirmed that the National Living Wage will rise to at least £11.00 per hour in April 2024. He will ultimately confirm what the precise increase in the National Living Wage will be, along with the new rates in relation to the National Minimum Wage, in his upcoming 2023 Autumn Statement, which he will deliver on the 22nd November 2023.
The Government has a target to increase the National Living Wage to two thirds of median earnings by April 2024. In its most recent projections, which it issued in March 2023, the Low Pay Commision stated: "We currently estimate the 2024 NLW rate required to meet this target to be in the range £10.90 to £11.43, with a central estimate of £11.16......This range is wider than normal as we judge that currently there is increased economic uncertainty."
