Millions of UK workers will still be left more than £1,000 a year short of a real living wage, despite the biggest cash boost in the minimum wage set by the government for more than a decade. The “national living wage” (NLW) is increasing from Monday from £10.42 to £11.44 an hour, and is being expanded to cover younger workers with a cut in the age threshold from 23 to 21. The increase is worth £1,800 a year for a full-time adult worker.
However, workers on the legal pay floor will still be left £1,092 a year short of the voluntary “real living wage” set by the Living Wage Foundation charity, which is paid by thousands of employers to reflect household costs. Almost half a million workers in the UK whose employers are signed up to real living wage are receiving an increase in pay to £12 an hour across the UK and £13.15 in London. The difference could pay for 18 weeks of food for a household, or 12 weeks of housing and energy costs.
Katherine Chapman, the director of the Living Wage Foundation, said: “The rise in the statutory national living wage from 1 April is welcome news for the 3.7 million low-paid workers across the country, but this still falls short of a wage which takes into account the real cost of living.” A government spokesperson said the increase and reduction in age threshold was a “historic moment which will put more money in the pockets of millions of workers” and struck a balance between worker needs and business affordability.
Increases in the government-enforced minimum wage have driven up the pay of millions of Britain’s lowest earners by £6,000 a year since its introduction in 1999. However, the government last week said it would pause efforts to drive up the minimum wage further amid business concerns, maintaining the current target for workers aged 21 and over next year. On current forecasts, the Low Pay Commission said this would mean increasing the national living wage by 3.9% to £11.89 in April 2025.
Paul Nowak, the general secretary of the TUC, said unions were “deeply disappointed” by the decision, urging a higher target of 75% of median pay to deliver a £15 an hour minimum wage. Labour has said the minimum wage should “cover the cost of living” but hasn’t spelled out what this means in practice. The Resolution Foundation said this “surely means taking the minimum wage higher, given it lies below the real living wage.”
