In an attempt to counter the after-effects of rising inflation, some low-paid workers are set to get a financial boost.
The voluntary living wage, which is paid by more than 3,600 employers in the UK will rise 3.6 per cent today to £8.75.
In London, where the cost of living is significantly higher than elsewhere in the country, the payments will rise 4.6 per cent to £10.20.
Many of the UK’s most high profile companies pay their workers the voluntary living wage including Google and Ikea. The wage is promoted by the Living Wage Foundation and it is entirely separate from the government’s compulsory National Minimum Wage (NMW) and the National Living Wage (NLW).
Some claim, however, despite the rise, that the wage is out of kilter with the actual costs of living, especially as rising inflation prompts food and transport costs to spiral upwards.
Andy Bagnall, director at KPMG UK, comments:
“Today’s announcement will see a significant number of employees that work for a Living Wage accredited business get a pay rise. The increase of just over four percent in London (£9.75 to £10.20) and three percent nationally (£8.45 to £8.75) may seem like small change to some, but for many it’ll make a huge difference to their lives, helping escape in-work poverty.
“The reality is that those at the bottom of the pay scale are really feeling the squeeze due to increases in the cost of living and decline in real pay. Paying a Living Wage will save huge swathes of people being unable to afford the basics they need.
“As employers we can take active steps to address this, by paying the real Living Wage. This also delivers real and tangible business benefits. In our own firm it has improved staff morale and driven a rise in service standards, improved the retention of staff and increased our productivity.
“It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay. Of course, change cannot happen instantly, but making an initial assessment is an important first step.”
Young Women’s Trust chief executive Dr Carole Easton OBE added:
“Young Women’s Trust welcomes the increase in the living wage. Low pay and job insecurity are causing high levels of debt and leaving young people struggling to afford the basics. Young women in particular are finding themselves on low wages and unable to make their money last to the end of each month. Sometimes, an hour’s childcare can cost more than an hour’s wages.
“Young people tell us they want to work hard and be financially independent – but Young Women’s Trust research shows they have little hope for the future.
“Much more needs to be done to improve young people’s prospects – and that includes employers paying a living wage. This would benefit businesses and the economy too.”