Higher rates kick start UK Living Wage Week

03 November 2014 -

Annual awareness drive gets underway with boosts in recommended hourly sums for British low-paid workers

Matt Packer

Living Wage week has opened today with improvements in the UK and London rates. Coordinated by the Living Wage Foundation in partnership with 1,000 accredited employers, the pay scheme sets recommendations for hourly earnings, designed to ensure that workers in some of the country’s lowest-paid jobs will still be able to have decent standards of living.

From today, the new rate for the UK is £7.85 per hour – up 2.6% on the 2013 rate, and 21% higher than the National Minimum Wage, which currently stands at £6.50. For workers in the high-cost environs of London, though, the rate has been set at £9.15.

Foundation director Rhys Moore said: “As the recovery continues, it’s vital that the proceeds of growth are properly shared. It’s not enough to simply hope for the best. It will take concerted action by employers, government and civil society to raise the wages of the 5 million workers who earn less than the Living Wage.”

This year’s Living Wage Week, he explained, had much to celebrate. “The good news,” he said, “is that the number of accredited Living Wage employers has more than doubled this year – over 1,000 employers across the UK have signed up. In the last 12 months the number of Living Wage employers in the FSTE 100 has risen from four to 18, including Canary Wharf Group and Standard Life. Those businesses that can should follow the example of Nestle and Nationwide – as well as hundreds of smaller, independent businesses like CTS Cleaning and Hodgson Sayers Roofing – who pay the Living Wage.”

He added: “Low pay costs the taxpayer money – firms that pay the minimum wage are seeing their workers’ pay topped up through the benefits system. So it’s right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process. The Living Wage is an independent calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay.”

Mike Kelly, head of Living Wage at “Big Four” finance firm KPMG, said: “Far too many UK employees are stuck in the spiral of low pay. The research identifies statistics and trends, but it also reports the concerns of people earning below the Living Wage who expect their finances to worsen during the next 12 months – and shows that debt levels have continued to rise among this group.”

Employers, he added, had much to gain from implementing the policy. “Unless wages rise,” he said, “a significant sector of the UK population will see themselves caught between the desire to contribute to society and the inability to afford to do so. Business benefits of the Living Wage include higher retention and productivity, and over 1,000 responsible businesses recognise this. The Living Wage may not be possible for every business, but is certainly not impossible to explore the feasibility of paying it.”

On 16 October, retailer PerfectHome became the first household-goods supplier to sign up to the scheme. Chief Executive Mike Sweetland said: “Our business rests on being a caring, service-focused retailer and a responsible employer. We value our people and felt that ensuring that all our employees are properly rewarded was the right thing to do. We are proud to be a Living Wage employer moving forward.”

Previous coverage of the Living Wage here.

Image from PerfectHome announcement courtesy of the Living Wage Foundation.