UK minimum wage is rising, but still leaves millions out of a real living wage

Even with the national living wage increase, it’s predicted that millions of UK workers will still be left more than £1,000 short of a real living wage.

The national living wage is increasing from Monday from £10.42 to £11.44 an hour, and is being expanded to cover younger workers with a cut in the age threshold from 23 to 21.

 For a full time adult worker, this increase is worth £1,800.

 These increases in minimum wage set by the government is one of the most successful economic policies in a generation according the Resolution Foundation.

 But workers on the legal pay floor will still be left £1,092 a year short of the voluntary “real living wage” which is set by the Living Wage Foundation charity, and paid by thousands of employers to reflect household costs.

 Almost half a million workers in the UK whose employers are signed up to real living wage are getting an increase in pay to £12 an hour across the UK and £13.15 in London next week.

 This difference could pay for 18 weeks of food for the average household, or 12 weeks of housing and energy costs.

 For those living in London, the charity said they’d would need more than £3,000 extra to make up the costs of living in London currently.

The pay rate is calculated using a basket of goods, taking into consideration everyday costs such as a weekly shop, household bills, an unexpected trip to the dentist, and extras for a decent life such as a birthday present for a child.

Katherine Chapman, the director of the Living Wage Foundation, said: “The rise in the statutory national living wage from 1 April is welcome news for the 3.7 million low-paid workers across the country, but this still falls short of a wage which takes into account the real cost of living.”

A government spokesperson said the increase in the NLW and reduction in age threshold was a “historic moment which will put more money in the pockets of millions of workers”.

“It strikes the best possible balance between the needs of workers and affordability for business while delivering on our commitment for the National Living Wage to reach two-thirds of median earnings by 2024.”

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