UK Living Wage rises to £7.85 per hour

The UK’s recommended living wage has been raised by 20p and is now set at £7.85. The London Living Wage (LLW) will rise from £8.80 to £9.15 as announced at the start of National Living Wage Week by the Mayor of London, Boris Johnson.

The living wage is based on the amount needed to cover the basic cost of living. This news now means that the national living wage is 21% higher than the compulsory minimum wage of £6.50 set by the government.

The uptake of the hourly rate has already been adopted voluntarily by over 1,000 employers across the country including Barclays, Nestlé and ITV, benefiting a total of 35,000 low paid workers.

In the capital, the number of accredited companies paying the London Living wage has doubled over the past 12 months and stands at more than 400, compared to just 27 employers who offered it in 2008.

Cross-party support

The rate is set by the Living Wage Foundation, an initiative of Citizens UK, and has received support across all of the main political parties. All are united in the opinion that wages should reflect the rising cost of living. More than one fifth of UK workers now earn less than the living wage and despite the reported economic recovery, the effects have not been reflected with the wages of the nation’s workforce.

Research by KPMG has reported that 22% of employees earn less than the recommended living wage, up from 21% in 2013, with responsibility of setting a living wage left up to the discretion of companies themselves.

Mike Kelly, head of living at KPMG said: “Although there are almost 1,000 employers who are pledged to pay a Living Wage, far too many employees are stuck in a spiral of low pay”.

Low pay is costing the taxpayer money, with firms who are paying the minimum wage seeing their worker’s pay topped up by the benefits system.

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