Around 180,000 workers employed by firms which offer the ‘real living wage’ will see their pay increase by 25p an hour, or 30p an hour in London.
The voluntary wage is to rise from £8.75 to £9 an hour, while the London rate will be rising from £10.20 to £10.55 an hour – a pay rise of 2.9%, and 3.4% for London workers.
Some 4,700 employers across the UK are signed up to the agreement, including large companies including IKEA, Aviva, Nationwide Building Society and Google.
The Real Living Wage is an independently calculated figure which works out the real cost of living to reflect what people need to spend to feed, clothe and house themselves.
It is calculated by the Living Wage Foundation charity, based on what it believes people need to live in the UK. It’s separate to the national living wage, which is a legal minimum rate set by the Government is currently £7.83 an hour for anyone over the age of 25.
Employers who already offer the real living wage will have until May 2019 to bring in the pay rise, though many are expected to do it immediately.
The Living Wage Foundation says the wage is going up due to hikes in council tax and transport and rent costs. The higher London rate reflects the increased costs of living in the capital.
They have to pay the real living wage not just to their staff, but to any sub-contractors as well.
About 180,000 employees will qualify for the pay rise.
Living Wage Foundation director Tess Lanning said:
Responsible businesses know that the Government minimum is not enough to live on, and today’s new living wage rates will provide a boost for hundreds of thousands of workers throughout the UK.
“Employers that pay the real living wage enable their workers to live a life of dignity, supporting them to pay off debts and meet the pressures of rising bills,”
“We want to see local councils, universities, football clubs, bus companies and the other major public and private sector employers in every city commit to become real living wage employers.”