The Living Wage Foundation has announced that the real Living Wage will increase to £12 (up from £10.90) an hour and will be adjusted to £13.15 with their London weighting in the capital and it applies to all employees over the age of 18.
The Living Wage Foundation began calculating the real Living Wage 10 years ago based on the cost of living and they encourage businesses voluntarily adopt their rates as the basis for pay settlements. The Foundation announces their new rates in Autumn each year (this year it was 24th October) and employers have until 1st May 2024 to implement the new rates. There are currently over 14,000 real Living Wage employers in the UK.
The real Living Wage is higher than the National Minimum Wage, which is the legal requirement. The current National Minimum Wage is £10.42 (for employees aged 23 or over) and, while the rate for 2024 / 25 has not yet been announced, the chancellor has intimated that it will be at least £11 an hour which is an increase of around 5.5%.
While perhaps justifiable in times of a cost of living crisis, these are significant increases for employers to take into account. Along with other rising costs, the cost and availability of labour can be a major challenge for some businesses.
It is a good idea for businesses to start looking at the impact of these increases at the earliest opportunity so that they can factor them into their budget planning for the next financial year.
For further information on minimum wages and any other HR issue please contact our team on 01484 841776 or email [email protected]