18 November 2014

UK living wage increases

The living wage in the UK has been increased by 20p, and it now stands at £7.85 per hour for those outside London. The rate in London will rise from £8.80 to £9.15 per hour; an increase of 4%, as announced by Boris Johnson earlier this month. 

This new increase of 20p per hour brings fresh considerations for all those companies enrolled, and all those who are thinking of enrolling to the voluntary scheme. Businesses operating in a particularly competitive environment are faced with a difficult decision - whether to employ x amount of people on the minimum wage, or reduce numbers & pay everyone the living wage.

What is the living wage?

The living wage is "an hourly rate, based on the amount needed to cover the basic costs of living", i.e. giving an individual a basic but decent standard of living. Currently, the living wage has been adopted by more than 1,000 employers across the UK, benefitting 35,000 workers. The number of companies paying the living wage has more than doubled in the past year.

Opting in to the living wage scheme is voluntary, and there is no intention for this to change.

What is the difference between the living wage and the national minimum wage?

The living wage is an informal benchmark, promoted by the Living Wage Foundation, and isn't a legally enforceable minimum level of pay.

The national minimum wage is a legally enforceable minimum level of pay, set by the business secretary each year on the advice of the Low Pay Commission. It is enforced by HM Revenue and Customs (HMRC).