Employers committed to offering “real Living Wage” rates are set to increase the pay of nearly 400,000 people across the UK.
The Living Wage Foundation today announced that the rate was rising by 10.1% to £10.90 an hour across the UK – an increase of £1 – and £11.95 an hour in London – an increase of 90p.
The annual rise in the Living Wage rates has been brought forward by nearly two months this year in recognition of the sharp increase in living costs over the past year.
Today, the Bank of England announced it had revised its forecasts for peak inflation in response to the government’s support on energy bills but it warned that price rises were expected to stay in double digits into 2023.
Its Monetary Policy Committee predicted that, after falling from 10.1% in July to 9.9% in August, inflation would peak at 11% in October, down from previous forecasts of 13%.
The Bank of England also raised interest rates from 1.75% to 2.25% today, putting it at the highest level since November 2008 when it was 3%.
The real Living Wage rates remain the only wage rates independently calculated based on what people need to live on. It is higher than the Government’s minimum wage, the National Living Wage, which for over-23s is £9.50 per hour.
This year’s 10.1% increase is the biggest ever year-on-year rise in the Living Wage Foundation’s 11-year history, reflecting sharp increases in living costs.
Living Wage employers in the garment sector include Manchester-based Clothes2order, schoolwear supplier One+All, workwear specialist Ørn, The Embroidery Barn, promotional products specialist Premier in Essex, and Uniform Express.
Katherine Chapman, director of the Living Wage Foundation, said: “We are facing unprecedented challenges with the cost-of-living crisis, but businesses continue to step up and support workers by signing up to the Living Wage in record numbers.
“We know that the Living Wage is good for employers as well as workers. That’s why the real Living Wage must continue to be at the heart of solutions to tackle the cost-of-living crisis.
“With living costs rising so rapidly, millions are facing an awful ‘heat or eat’ choice this winter – that’s why a real Living Wage is more vital than ever.
“Today’s new rates will provide hundreds of thousands of workers and their families with greater security and stability during these incredibly difficult times.”
A full-time worker earning the new Living Wage rate would earn £2,730 a year more than a worker earning the current government minimum wage and £1,950 more than their current pay.
In London, a full-time worker on the new real Living Wage rate would earn an additional £4,777.50 a year compared to a worker on the current National Living Wage.