Why pay the London Living Wage?

Paying the London Living Wage is good for business, employees and the wider UK economy. 

The London Living Wage is based on the actual cost of living in the capital. 

At £11.95 per hour, it is worth £4,777.50 more per year than the current National Living Wage (the Government minimum). 

There are 3,000 Living Wage employers already based in London, and 150,000 Londoners already get a pay rise every year because of the London Living Wage. 

However, one in five Londoners still earns below the London Living Wage – that’s 700,000 workers – who will be particularly struggling during the cost-of-living crisis.

That’s why we’re working together with Citizens UK, the Living Wage Foundation, the Mayor of London and Trust for London to help make London a Living Wage City. We are working with the Steering Group to lift tens of thousands of workers out of in-work poverty, by boosting the number of accredited Living Wage employers in the capital.

What goes into calculating the real Living Wage rates from Living Wage Foundation on Vimeo.

What is the London Living Wage?

The London Living Wage is a wage rate based on what people need to earn to live in London. 

It is calculated by the Living Wage Foundation according to the real cost of living based on a basket of household goods and services. 

The London Living Wage is higher than the Real Living Wage (£10.90 outside of London) as it reflects the higher living costs in the capital.

It is a voluntary wage rate for those 18 and over, adopted by organisations that can be accredited to demonstrate their commitment to paying the real cost of living. 

The London living wage is currently set at £11.95 per hour.

How does it differ from other wage rates? 

The Real Living Wage and London Living Wage are voluntary wage rates, calculated by the Living Wage Foundation, based on a basket of household goods and services.

The National Living Wage is a statutory rate for those 23 and over. This is calculated by a % of median earnings, rather than reflecting the real cost of living. It is national and there is no London weighting.

The National Minimum Wage is a statutory rate for those of at least school-leaving age. 

The London Living Wage takes into account the higher housing and childcare costs in the capital, to determine a real wage on which people can get by. This is why we encourage all employers that can afford to do so to ensure their employees earn a wage that meets the cost of living, not just the government minimum.

Why pay the London Living Wage? 

There are real benefits for businesses paying the London Living Wage. 

In a study by the Living Wage Foundation with Cardiff Business School, nine out of ten businesses paying the London Living Wage say it has improved its reputation as an employer, and 63% believe it has helped differentiate them from competitors. 

It is also a significant aid to recruitment, retention, and relations between employees. 

Of businesses paying the rate, 63% say it has improved relations between managers and workers, 60% say it has improved recruitment of employees receiving the London Living Wage, and 58% say it has improved retention, motivation and commitment of employees receiving the London Living Wage. A further 55% say it has improved the quality of job applicants and made the organisation more attractive to graduates. 

So, with many businesses struggling to recruit whilst skills gaps prevail, paying the London Living Wage is proven to give businesses an advantage.