The voluntary so-called Real Living Wage is to increase by 10% to reflect the ongoing cost-of-living crisis for workers, it has been announced.

More than 460,000 people working for 14,000 employers who pay the rate will receive a wage rise.

The Living Wage Foundation said its rates will increase to £12 an hour outside London – a rise of £1.10 – and to £13.15 an hour in the capital – a £1.20 increase.

The foundation said the 10% rise, coming into effect on Tuesday, reflects “persistently high costs” for low-paid workers.

(PA Graphics)
(PA Graphics)

The voluntary rate, which applies to everyone over the age of 18, compares to the statutory National Living Wage for over-23s of £10.42 an hour.

A full-time worker earning the new Real Living Wage will earn £3,081 a year more than someone on the current government minimum, and an additional £5,323 in London, according to the foundation.

Its research found that, despite easing inflation, the cost-of-living crisis is far from over for low-paid workers, with 50% worse off than a year ago.

More than two in five low-paid workers say they regularly use a food bank and almost as many report falling behind on household bills, said the foundation.

Living Wage Foundation director Katherine Chapman said: “As inflation eases, we cannot forget that low-paid workers remain at the sharp end of the cost-of-living crisis.

“Low-paid workers continue to struggle with stubbornly high prices because they spend a larger share of their budget on food and energy.

“These new rates are a lifeline for the 460,000 workers who will get a pay rise.”

The foundation said record numbers of employers are signing up to pay the voluntary rates.

Unison general secretary Christina McAnea said: “This is good news for hundreds of thousands of low-paid workers whose employers do the right thing. That’s pay them a decent wage.

“But many more providing essential public services will miss out. These employees include care workers, who’re often on poverty pay, in a sector already struggling to fill record vacancies.

“Today’s increase means thousands of workers employed by the NHS on the lowest pay bands – like porters, cleaners, domestics and security staff – will be significantly short of the new rate.

“The Government must follow suit and boost the minimum wage so millions are better able to weather the cost-of-living pressures causing such deep financial pain.”

Paddy Lillis, general secretary of shop workers union Usdaw, said: “The new Real Living Wage rates, which are based on an individual’s cost of living, are welcome and clearly show that the Government’s so-called ‘National Living Wage’ is nothing of the sort.

“We are particularly pleased that the £12 goal that Usdaw has been campaigning for has now been reached by the Living Wage Foundation. We continue our efforts to persuade the Government and more employers to adopt £12.”