New 2015 Living Wage rates announced

04 November 2014

The UK Living Wage rate has been set at £7.85 per hour, an increase of 2.6% on the 2013 rate and 21% higher than the national minimum wage of £6.50 per hour; improving the take home pay of 35,000 low-paid workers across the country who are employed by over 1,000 Living Wage accredited organisations. The London Living Wage rate has been set at £9.15.

We are grateful to the Living Wage Foundation for their report .

Rhys Moore, Director, Living Wage Foundation said: “As the recovery continues it’s vital that the proceeds of growth are properly shared. It’s not enough to simply hope for the best. It will take concerted action by employers, government and civil society to raise the wages of the 5 million workers who earn less than the Living Wage.

“The good news is that the number of accredited Living Wage employers has more than doubled this year – over 1,000 employers across the UK have signed up. In the last 12 months the number of Living Wage employers in the FSTE 100 has risen from four to 18 including Canary Wharf Group and Standard Life.

“Those businesses that can should follow the example of Nestle and Nationwide, as well as hundreds of smaller, independent businesses like CTS Cleaning and Hodgson Sayers Roofing, who pay the Living Wage. Low pay costs the taxpayer money – firms that pay the minimum wage are seeing their workers’ pay topped up through the benefits system. So it’s right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process. The Living Wage is an independent calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay.”

The rate announcement coincides with research released today by KPMG, one of the Living Wage Foundation’s principal partners, which found that 5.28million UK workers are being paid less than the Living Wage, with huge swathes of employees working in the retail, catering and care sectors, clustered around minimum wage pay levels.

Mike Kelly, Head of Living Wage, KPMG said: “Far too many UK employees are stuck in the spiral of low pay. The research identifies statistics and trends, but it also reports the concerns of people earning below the Living Wage who expect their finances to worsen during the next 12 months and shows that debt levels have continued to rise among this group. Unless wages rise, a significant sector of the UK population will see themselves caught between the desire to contribute to society and the inability to afford to do so. Business benefits of the Living Wage include higher retention and productivity, and over 1,000 responsible businesses recognise this. The Living Wage may not be possible for every business, but is certainly not impossible to explore the feasibility of paying it.”

During 2014 household names such as Nationwide and Nestle have made the move to become Living Wage employers, ensuring all their directly employed staff, as well as third party contractors such as security and cleaning teams, are also paid at least the Living Wage.

In support of Living Wage Week, Nationwide will be displaying the Living Wage logo at over 250 branches and on the homepage of their online banking service. Stephen Uden, Head of Corporate Citizenship, Nationwide said: “We are pleased to pay all our staff from branch cleaners, to cashiers and senior managers, fair and decent levels of pay. Accrediting as a Living Wage employer made good business sense. Our customers told us that they value our commitment to fair reward for all. To celebrate Living Wage Week we are proudly displaying the Living Wage logo to demonstrate we are part of a movement of responsible businesses. Increased staff motivation and retention rates, reduced absenteeism and recruitment costs are common benefits reported following implementation of the Living Wage. We hope that consumers will start to see more of the Living Wage logo over the next year, as further businesses accredit. People will be able to show their support with their feet and their wallets.”

The Living Wage is calculated by the Centre for Research in Social Policy, Loughborough University, whilst in the capital the rate is set by the Greater London Authority and is based on a combination of a basic living costs approach and income distribution, with respect to a variety of household types which takes account the unique circumstances of living in London.

The Living Wage Foundation is an initiative of Citizens UK, national community organising charity, which brings together people from every part of society and enables them to work together for the common good.