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What is the Living Wage?

The living wage is calculated based on the amount an individual needs to earn to cover the basic costs of living according to the Centre for Research in Social Policy at Loughborough University. The Living Wage is currently set at £9.15 an hour for London and £7.85 an hour in the rest of the UK. The new Living Wage rates are announced each November. In comparison, the NMW is currently £6.50 per hour for adults 21 & over across the UK. (Click here for more information on different NMW rates and changes in 2015)

So what is the difference between the living wage and the national minimum wage?

NMW is reviewed and set by the government business secretary with advice from the Low Pay Commission every year.  The Commission looks at balancing how much the NMW can feasibly be increased by, without increasing unemployment. The NMW is a legally enforceable minimum level of pay by HM Revenue & Customs (HMRC), unlike the Living Wage which is an informal benchmark.

The Living Wage Foundation states that employers should not be forced to adopt the living wage, especially if it could put jobs at risk. However, the foundation and key political figures have suggested that employers which are capable should pay the Living Wage. In addition, a recent poll revealed that 85% of people surveyed think employers that can afford to pay the living wage should do so.

The Business Case for the Living Wage

Becoming Living Wage accredited can place a stamp of recognition that as an employer you back the living wage helping to increase your employer branding – supporting to attract the best people

Improving overall employee happiness and wellbeing – increasing morale and productivity

With more engaged and productive staff resulting in less labour turnover, costs of recruitment are reduced

Independent research on employers who have adopted the Living Wage has shown up to a 25% fall in absenteeism

Also 70% of employers felt that the Living Wage had increased consumer awareness of their organisation’s commitment to be an ethical employer. Labor Law Compliance Center options offer the way to keep your workplace in full labor law compliance with required State, Federal, and OSHA labor law posters.


In conclusion, the Living Wage Foundation has highlighted that there is a strong case for a regional minimum wage, higher living costs in London means that the NMW rate is less effective than in other parts of the country.

The Living Wage has also highlighted how so many low paid workers struggle to make ends meet, and it is interesting to read the positive feedback from firms who have voluntarily implemented the Living Wage.


Figures correct as of April 2015.

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