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Thousands of workers set for pay rise

Paloma Kubiak
Written By:
Paloma Kubiak

More than 100,000 UK workers will see their hourly wages rise, helping to offset the impact of rising inflation.

The voluntary UK Living Wage has increased by 30p from £8.45 to £8.75 an hour while the London Living Wage has risen by 45p from £9.75 to £10.20 an hour.

This is a 3.6% rise in the UK and 4.6% rise in London – the first time the London amount has risen above the symbolic £10 per hour mark.

The 2017 Living Wage increases have largely been driven by higher inflation feeding through to the basket of goods and services that underpin the rates, with rising private rents and transport costs also having an impact.

The wage rise comes into effect from today, but employers will have their own ‘phase in period’ for the change, according to the Living Wage Foundation. It estimated 150,000 UK workers will benefit.

The Living Wage is one of three wage schemes in operation – it’s calculated according to the basic cost of living in the UK but is voluntary, so employers can choose to pay this amount. Currently, 3,600 are signed up across the UK with 1,000+ employers in London.

Separately, there is the National Minimum Wage, which applies to those under the age of 25 (between £7.05 an hour and £3.50) and the National Living Wage, which is for all working people aged 25 and over. It stands at £7.50 an hour.

The announcements come after new research published by KPMG yesterday showed that 5.5 million people across the UK are still paid less than the real Living Wage, equivalent to one in five workers, or 21% of the UK workforce.

Living Wage Foundation director, Katherine Chapman, said: “The new Living Wage rates announced today will bring relief for thousands of UK workers being squeezed by stagnant wages and rising inflation. It is thanks to the leadership of over 3,600 employers across the UK who are committed to paying all their staff, including cleaners and security staff, a real Living Wage.

“Great businesses know that, even during these tough times, not only is fair pay the right thing to do but paying the real Living Wage brings big benefits. Nine out of ten accredited Living Wage employers report real benefits including improved retention, reputation, recruitment and staff motivation.”

Heathrow Airport today became the first UK airport to sign up as a Living Wage Employer, benefiting up to 3,200 workers by the end of 2020.