A tool shows whether you’re one of almost half a million workers set to get a 5 per cent pay rise this year. Half a million workers are set to see their hourly pay rise by 5% due to an increase in the ‘real living wage’ – a voluntary employers’ pay scheme based on the cost of living.
Those covered by the scheme will see their pay rise to at least £12.60 an hour, while those in London will get £13.85 an hour. From 1 April 2025, the minimum wage paid to workers aged 21 and over will rise from £11.44 an hour to £12.21 an hour, an inflation-busting 6.7% increase, as announced by Labour Party Chancellor Rachel Reeves in her Autumn Budget.
Over 15,000 businesses across the UK voluntarily pay their staff more under the Real Living Wage. New rates were announced for the R livingeal Living Wage last October, but employers have until May 1 to implement them.
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A full-time worker earning the new real living wage will get £2,262 more a year than a worker on the current national minimum wage, according to Living Wage Foundation. In London, they would earn £4,700 more than a worker on the national minimum wage.
A tool tells you if your employer is one that offers a bumper pay packet. You can find it via – www.livingwage.org.uk/accredited-living-wage-employers. The organisation runs an accreditation scheme where businesses are committed to paying all staff and those in their network the living wage.
The rates are calculated annually by think-tank The Resolution Foundation and overseen by the Living Wage Commission, based on the best available evidence about living standards in London and the UK. It uses a public consultation method called MIS to inform the rate. MIS asks groups to identify what people need to be able to afford as a minimum.
This is fed into a calculation of what someone needs to earn as a full-time salary, which is then converted to an hourly rate.