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 85p per hour from £12.60 per hour to £13.45 per hour, an increase of 6.7%. The 16,000 employers who are signed up to the scheme (up by 2,500 compared to last year) are expected to implement the new rate by the 1st May 2026. The new rate of £13.45 per hour means that the Real Living Wage is now £1.24 per hour higher than the current rate of £12.21 per hour for the National Living Wage.
The new rate for the London Living Wage has also 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 95p per hour from £13.85 per hour to £14.80 per hour, an increase of 6.9%. Again, those employers who are signed up to the scheme are expected to implement the new rate by the 1st May 2026. Accordingly, the London Living Wage is now £2.59 per hour higher than the current rate for the National Living Wage.
The percentage increases in both the Real Living Wage and the London Living Wage are well above the current level of inflation (3.8%), meaning that there will be a real terms increase in both rates (2.9% and 3.1% respectively)
For a full-time worker on the new rate for the Real Living Wage, they will earn £2,418.00 more a year than one who is on the current rate for the National Living Wage (i.e. earning £26,227.50 per annum on a 37.5 hour week, compared to £23,809.50). Those on the new rate for the London Living Wage, will earn £5,050.50 more per annum (i.e. earning £28,860.00 per annum on a 37.5 hour week, compared to £23,809.50)
The new rate for the Real Living Wage is usually announced in October / November each year, with arouund 490,000 workers now receiving the Real Living Wage (1.4% of the workforce)
Currently, 4.5 million workers earn less than the Real Living Wage, which represents 13.1% of the workforce. That is up from 3.5 million workers (12.2% of the workforce) back in 2023
Commenting upon the increase in the Real Living Wage, the executive director of the Living Wage Foundation, Katherine Chapman, stated: "We all need a wage that covers life’s essentials, and the real Living Wage is the only UK wage rate independently calculated based solely on what is needed to cover rising living costs. The new rates announced today will make a massive difference to workers and their families, helping them to better cope with the costs of rent, bills, food and other essentials, and to live with stability and security."
Chapman added: “It remains a tough time for low-paid workers, with 4.5 million people still earning less than the real Living Wage and struggling to escape the grip of in-work poverty. That’s why we encourage as many employers as possible to do the right thing and commit to paying a wage that reflects the real cost of living."
The new rates for the National Living Wage and the National Minimum Wage that will apply from the 1st April 2026 will likely be announced on the eve of the 2025 Autumn Budget, which will be delivered on the 26th November 2025.
Increase Welcomed
Whilst some small businesses have expressed concerns about the affordability of higher wage bills, particularly in sectors with tight margins such as hospitality and retail, the increase in the Real Living Wage and London Living Wage has been welcomed by campaigners, unions, and many employees who have long argued for wages that reflect the true cost of living.
Supporters note that higher wages not only help lift workers out of poverty but also benefit businesses through improved staff retention, morale, and productivity. Moreover, employers who voluntarily sign up to the Living Wage Foundation’s scheme often report a stronger reputation among consumers and an easier time attracting talent.
