‘Real Living Wage’ Vs the ‘National Living Wage’ – the differences explained

Unlike the government’s ‘National Living Wage’ (£8.91 for over 23s, increasing to £9.50 in April), the actual Living Wage is the only wage rate that is calculated independently based on actual living costs, such as fuel, energy, rent, and food.

A full-time worker on the ‘Real Living Wage’ earns £1,930 more per year than someone on the Government’s misleading National Living Wage (NLW). Based on current household expenditure in the UK, that’s the equivalent of 7 months’ worth of food costs and more than 5 months’ worth of rent for a worker today.

Even when considering the increased NLW rate of £9.50 beginning in April 2022, a full-time worker earning the RLW will will take home £780 more.

For example: In London, a full-time worker on the new RLW rate would earn an additional £4,173 a year compared to a worker on the current NLW and £3,022 more than a worker on next year’s National Living Wage.

New research by the Living Wage Foundation shows that Living Wage employees have benefitted from more than £1.6bn in extra wages during this period over the last 20 years, with One in 13 workers now working for an accredited Living Wage Employer.

The new research also exposes the true scale of low pay during the COVID-19 pandemic. According to the research, 4.8 million jobs (17.1% of employee jobs) still pay less than the RLW.

There are currently around 300,000 people working for around 9,000 Real Living Wage employers set to benefit from a 40p increase to the RLW, which will see the hourly rate rise to £9.90 across the UK and £11.05 in London.

Some of the newest Living Wage employers include half of the FTSE 100 companies, such as Aviva, Everton FC, Burberry and Lush. Capita, who carry out disability assessments on behalf of the Department for Work and Pensions, is also an accredited Living Wage employer.

The number of accredited Living Wage employers in the UK has grown by more than 3,000 since the start of the pandemic and campaigners hope this number will continue to grow further.

Katherine Chapman, Living Wage Foundation Director, said: “With living costs rising so rapidly, today’s new Living Wage rates will provide hundreds of thousands of workers and their families with greater security and stability.

“For the past 20 years the Living Wage movement has shaped the debate on low pay, showing what is possible when responsible employers step up and provide a wage that delivers dignity.

“Despite this, there are still millions trapped in working poverty, struggling to keep their heads above water – and these are people working in jobs that kept society going during the pandemic like social care workers and cleaners.

“We know that the Living Wage is good for businesses as well as workers, and as we rebuild our economy post pandemic, the real Living Wage must be at its heart.”

The Archbishop of York, the Most Revd Stephen Cottrell, said: “This Living Wage Week, the Living Wage Foundation has announced the new rates that cover what we all need to earn to get by.

“Their movement will see over 9,000 businesses elect to give their 300,000 workers not only what they need to survive, but to thrive as well.

“The principle behind the campaign for better pay and secure working conditions ought to be a pillar of our new society, and one I hope will be adopted by even more forward-thinking businesses as we look ahead to 2022.”


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