UK employers paying the voluntary “real living wage” are set to deliver a double-digit pay increase for the second year in a row, offering a glimmer of hope to workers as inflation begins to subside.
The Living Wage Foundation, a charitable organization advocating for fair pay, announced on Tuesday its decision to raise the national living wage rate from £10.90 to £12 an hour in 2024, following a similar increase in 2022.
In a move aimed at tackling the higher costs of living in the capital, the London rate will also experience a substantial boost, rising from £11.95 to £13.15 an hour. This decision is expected to directly benefit approximately 460,000 individuals working for 14,000 employers accredited by the charity.
This move is not without it’s flaws however. The increase will put pressure on small business owners who strive to pay their employees above the minimum wage. Additionally, there’s a growing need among businesses to demonstrate their commitment to social responsibility, which makes adopting the voluntary living wage increasingly necessary.
The Living Wage Foundation annually sets the voluntary rate based on the minimum income required for various types of families to make ends meet, accounting for expenses such as rent, childcare, and travel, along with other basic needs. A full-time worker on the new voluntary rate will earn £3,801 more per year than someone paid the current UK statutory minimum wage.
Alarming statistics from the Living Wage Foundation reveal that 60 percent of workers paid below the voluntary living wage have had to resort to food banks over the past year.
Chancellor Jeremy Hunt recently confirmed that the statutory hourly minimum wage will increase next April to at least £11, and it’s expected to align closely with the recommendation of the independent Low Wage Commission, which is likely to be around £11.20.