In a major economic announcement, the Living Wage Foundation has declared a significant increase in the voluntary real living wage rate for workers across the United Kingdom. The decision comes at a pivotal time when inflation rates are high, and low-paid workers are grappling with the escalating cost of living.
Key Changes: What You Need to Know
The announcement today (Tuesday), says the voluntary real living wage will increase by 10%, set at £12 per hour across the UK and £13.15 per hour in London. Employers will have a window of six months to enact these changes, bringing tangible relief to approximately 460,000 workers who are aged 18 and above. The increase seeks to provide a financial “lifeline” to those facing economic hardship, particularly amidst rising prices for essential goods and services.
The Real Impact on Earnings
An interesting aspect of this wage revision is its clear differentiation from the National Living Wage, which currently stands at £10.42 per hour for those aged 23 and over. Chancellor Jeremy Hunt also plans to raise the statutory rate to at least £11 an hour by 2024. The Living Wage Foundation, in its statement, elaborated that a full-time employee receiving the new voluntary real living wage would earn £3,081 more annually than those on the government minimum wage. In London, this disparity extends to an extra £5,323 per year.
Who Are the Major Employers Involved?
Companies voluntarily opting into this scheme include corporate giants like Aviva, Burberry, Ikea, KPMG, and Nationwide. Initiated nationally in 2011, the program has consistently been a subject of corporate social responsibility, setting an example for ethical employment practices.
The Backdrop of Inflation
While the Bank of England’s target for inflation stands at 2%, the current rate has remained stubbornly high at 6.7% for the past two months. It underscores the challenges low-paid workers face, as they allocate a larger portion of their budgets to essentials such as food and energy.
Urgency and The Way Forward
The Living Wage Foundation’s study suggests that 50% of low-paid workers are worse off than a year ago. Such statistics affirm the urgency for this wage increase, as articulated by Living Wage Foundation director Katherine Chapman: “Low-paid workers remain at the sharp end of the cost-of-living crisis.”
The Workers Union Says…
“The voluntary real living wage increase is not just a financial adjustment; it is a social commitment to uplift those who are economically vulnerable. As the dynamics of the UK job market continue to evolve, it’s crucial that such progressive steps become the norm rather than the exception, making way for a more equitable working environment.”