According to new research, a fifth of UK employees are earning less than the real Living Wage.

Over a quarter of a million employees in the UK are set to see a boost in their pay due to the increase in the real Living Wage.

In the UK, the real Living Wage has risen to £9.50 which is a 20p increase per hour in comparison to previous earnings. In London, the real Living Wage has increased to £10.85, a 10p rise.

The real Living Wage differs from the National Living Wage as the former is based on “independently calculated [results] based on what people need to live on”. Whilst the real Living Wage is now £9.50 in the UK, the national Living Wage lags behind at £8.72 for those aged 25 and over.

The real Living Wage foundation is made up of almost 7,000 employers in the UK which includes two-fifths of the FTSE 100. Companies who are part of this foundation agree to pay their staff the real Living Wage, a fact the foundation states will “ensure all staff earn a wage that meets the real cost of living and [covers] everyday needs”.

According to figures from the foundation, 93 per cent of employers who have implemented the real living wage have benefitted from this. Over eight out of 10 businesses (86 per cent) stated that it improved the company’s reputation. Three-quarters (75 per cent) reported increased motivation levels and a higher employee retention rate. Just under two-thirds (64 per cent) said it helped differentiate themselves from others in their industry whilst over half (58 per cent) saw an improved relationship between managers and employees.

COVID-19 has particularly affected areas of pay with 5.5 million jobs around the UK paying less than the real Living Wage. Northern Ireland had the highest proportion of jobs paying less than the real Living Wage (20.3 per cent of jobs). Conversely, Scotland had the least – standing at 15.2 per cent.

This increase in pay has a significant effect as the research shows a full time worker paid the new real Living Wage will receive over £1500 annually in comparison to those earning the current Government minimum wage. For an employee living in London, this figure rises to over £4000.

Laura Gardiner, Director of the Living Wage Foundation, said:

It’s an incredibly challenging time for us all, but today’s new Living Wage rates will give a boost to hundreds of thousands of UK workers, including thousands of key and essential workers like cleaners, care workers, and delivery drivers who have kept our economy going.

Since the start of the pandemic employers have continued to sign up to a real Living Wage. During Living Wage Week it’s right that we celebrate those employers that have done right by workers and families, providing them with much needed security and stability even when times are hard. These are the employers that will allow us to recover and rebuild from this crisis.

Mayor of London, Sadiq Khan, called on all businesses to sign up for the voluntary real Living Wage.

What I’m asking other employers to do today, those in the public sector and private sector, who aren’t yet paying the Living Wage – about 20 per cent of Londoners don’t yet receive a London Living Wage – is for them to look at the evidence. The evidence is if you’re a Living Wage employer – increased productivity, better staff retention and better staff morale so it’s a win-win.