Definition
A voluntary hourly pay rate calculated by the Living Wage Foundation based on the actual cost of living in the UK, set independently of government and currently higher than the statutory National Living Wage.
UK Context
The Real Living Wage is set by the Living Wage Foundation, an initiative of Citizens UK. It is voluntary and distinct from the statutory National Living Wage set by the government. Over 14,000 UK employers are accredited, including many local authorities, NHS trusts, universities, and FTSE 100 companies. The rate is updated annually, usually in November, based on updated cost-of-living data.
Best Practices
- Consider Real Living Wage accreditation as part of your employer brand and corporate responsibility strategy
- Budget for the annual rate increase, which is announced in November each year
- Include contractors and agency workers in your Living Wage commitment, as required for accreditation
- Communicate your Living Wage commitment in recruitment materials to attract candidates
Frequently Asked Questions
What is the difference between the Real Living Wage and the National Living Wage?
The Real Living Wage is a voluntary rate set by the Living Wage Foundation based on actual living costs, currently 12.60 pounds per hour (UK) and 13.85 pounds (London). The National Living Wage is the statutory minimum set by the government at 12.21 pounds per hour for workers aged 21 and over. The Real Living Wage is always higher.
How do I become a Living Wage employer?
Apply through the Living Wage Foundation website. You must commit to paying all directly employed staff and regular third-party contractors at least the Real Living Wage. Accreditation fees are based on organisation size. You must reaccredit annually when the rate is updated.
Does the Real Living Wage apply to all workers?
For accredited employers, yes. Unlike the NLW which only applies to workers aged 21+, the Living Wage Foundation recommends paying the Real Living Wage to all workers aged 18 and over. Accreditation also requires extending the rate to regular contractors.