With the cost of living crippling millions in the UK, the Government has had to intervene. However, despite steps such as increasing the National Minimum Wage in April and providing grants and schemes to help homeowners combat soaring energy costs, for many individuals, it's simply not enough to make ends meet.
As a result, organisations such as The Living Wage Foundation and Unite the Union are calling for wages to rise considerably. In fact, Unite is pressing for the National Minimum Wage to be increased to £15 as soon as possible to prevent even more individuals and families from being forced into poverty.
Additionally, The Living Wage Foundation calculates the real cost of living each year and argues that the Living Wage should be £9.90 instead of the Government enforced National Living Wage of £9.50. This would provide individuals with £1,930 more each year. The foundation also campaigns for a different Living Wage for those living in London, as living costs are higher — this is known as the London Living Wage.
In this article, we'll cover all you need to know about the London Living Wage, what it really costs to live in the UK's capital city, and what the current Real Living Wage, National Living Wage and National Minimum Wage rates are. Let's dive in!
The London Living Wage is set at £11.05 per hour and is the London rate of the Real Living Wage. These are hourly wages set independently by the Living Wage Foundation, as opposed to the National Minimum Wage (NMW) and the National Living Wage (NLW), which are set by the government. The Real Living Wages are voluntary and are currently paid by nearly 10,000 Living Wage Employers, including household names such as Lush, Aviva and Brewdog.
While there is still a long way to go to end poverty in the UK, the movement has seen great success so far. Over the past 20 years, the Living Wage movement has won pay rises for over 260,000 workers and continues to campaign to end in-work poverty. The foundation has also revealed that one in 13 people now work for an accredited Living Wage employer.
The Living Wages are based on the real cost of living in the UK and are calculated annually by the Resolution Foundation and the Living Wage Commission.
Unlike the NMW and the NLW, the Real Living Wage recognises that living costs are higher for those residing in London. For this reason, there are two hourly rates:
- London Living Wage rate: £11.05 per hour
- UK Living Wage rate: £9.90 per hour
The main difference between the Real Living Wage and the National Living Wage is that the Real Living Wage is voluntary for employers, whereas the National Minimum Wage is a legal requirement. Aside from this, there are a few other differences between the two.
The Real Living Wage is:
- Independently set by the Living Wage Foundation
- Voluntary for employers
- Applies to all employees over 18 years old
- Has two hourly rates — £9.90 for the UK and £11.05 for London
The National Minimum Wage is:
- Set by the government
- Legally enforceable
- Must be paid to all employees the age of 23 years
- The highest wage rate is £9.50 per hour
The following table shows the rates for the National Living Wage (for individuals aged 23 and older) and the National Minimum Wage (for those who are of at least school leaving age). Rates are changed each year on 1 April.
The NMW and the NLW as of 1 April 2022 are as follows:
|23 and over||21 to 22||18 to 20||Under 18||Apprentice|
As is shown, the hourly rate an employee is entitled to depends on their age and whether they are an apprentice.
To be entitled to the National Minumum Wage, you must be of at least school leaving age and classed as a worker — this generally means you have a contract or arrangement to do work.
The following individuals are also entitled to the National Minimum Wage:
- Part-time workers
- Casual labourers
- Agency workers
- Workers paid by the number of items they make
- Trainees and workers on probation
- Disabled workers
- Agricultural workers
- Foreign workers
- Offshore workers
It is also worth noting that the rate you are entitled to it is not impacted by your position within a company.
However, you will not be entitled to the National Minimum Wage if you are self-employed, a company director, a volunteer or voluntary worker, or a family member of your employer and residing in their home.
If you are an apprentice, you will be entitled to the apprentice rate if you are either:
- Under the age of 19
- Over the age of 19 and in the first year of your apprenticeship
However, apprentices are entitled to the National Minimum Wage for their age if they are over the age of 19 and have finished the first year of their apprenticeship. For example, if you are 21 years old and an apprentice in your first year, you'll be entitled to the apprentice rate of £4.81. Whereas an apprentice who is the same age but is in the second year of their apprenticeship will be entitled to the National Minimum Wage for their age bracket, which in this case is £9.18.
It is against the law for your employer to pay less than the National Minimum Wage or the National Living Wage. If you think you have not been paid the correct wage, speak to your employer.
If this does not resolve the issue, you can Contact Acas (England, Scotland and Wales) or the Labour Relations Agency (Northern Ireland) to get confidential advice. Alternatively, you can raise a grievance with your employer if your company has a procedure available. If you still cannot resolve the problem, Contact HMRC to make a complaint about your employer or make a claim to an employment tribunal. You will need to decide which course of action to take as you cannot report an employer to HMRC and make a claim to an employment tribunal at the same time.
If you contact HMRC and they find that your employer has been underpaying you or other employees, they can issue your employer with a Notice of Underpayment and a fine. They also have the power to take your employer to court if they refuse to pay your entitled wages.
It's no secret that London is the most expensive place to live in the UK. It's also the third most expensive city in Europe behind Zurich and Geneva. But just how much does living in the capital actually cost? Using data from the cost of living calculator Expatisan, we'll cover how much living in London will set you back.
Starting with the overall cost of living, the estimated monthly costs for a family of four total £5,635. For a single person, the average is again high at an estimated total of £3,507. These figures are considerably higher than the UK averages, which are £4,239 for a family of four and £2,514 for a single person. This means that a family living in London will be subjected to costs that are just over 30% higher than the UK average. Single individuals will find the cost of living in London to be even steeper, with costs being almost 40% higher than in the rest of the UK.
When it comes to properties, the government's House Price Index shows the average house price in London is £529,829 as of April 2022. In comparison, the average house price in England is £299,249 and £211,990 in Wales. That said, London is not the only area of the UK where property prices are proving an issue for homebuyers. Throughout the UK, house prices have risen by 12.4% from April 2021 to April 2022.
The London Living Wage is a voluntary hourly wage set by the Living Wage Foundation. It is based on the real cost of living in the UK and takes into consideration the higher living costs in London (including the Greater Boroughs). For this reason, there are two rates:
- London Living Wage rate: £11.05 per hour
- UK Living Wage rate: £9.90 per hour
Aside from the Real Living Wage, there are the National Minimum Wage and the National Living Wage. These are set by the government and are a legal requirement for employers. Unlike the Real Living Wage, the NMW and the NLW rates are determined by age and whether an individual is an apprentice. However, all accepted workers who are above school leaving age will be entitled to the National Minimum Wage.