The Real Living Wage is set to jump to at least £13.45 per hour in a significant move that could deliver higher pay packets to hundreds of thousands of workers as Britain grapples with the ongoing cost of living crisis.
The anticipated increase, expected to be formally announced on 24th October, represents a substantial rise from the current rate of £10.90 per hour across the UK (£11.95 in London). The voluntary wage rate, calculated independently by the Living Wage Foundation, is designed to reflect what workers actually need to cover basic living costs—unlike the government's statutory National Living Wage, which is based on median earnings.
In practice, this means the Real Living Wage covers essential expenses such as housing, food, and utilities, providing what campaigners argue is a more realistic income floor for workers. Over 14,000 UK employers have already committed to paying these rates voluntarily, going beyond their legal obligations under minimum wage legislation.
The timing is politically significant, coming as households continue to face pressure from persistent inflation despite recent falls in the headline rate. Whilst the government sets minimum wage rates through its statutory framework—the National Living Wage for those aged 23 and over, and the National Minimum Wage for younger workers—the Real Living Wage movement represents a market-led response to economic pressures.
The calculation methodology involves assessing a comprehensive basket of household goods and services alongside housing costs to determine the income required for a decent standard of living. This bottom-up approach contrasts with the government's percentage-of-median-earnings formula, reflecting different philosophical approaches to wage-setting.
Employers adopting the Real Living Wage frequently report tangible benefits including improved staff morale, reduced absenteeism, and better retention rates. The Living Wage Foundation argues this creates a virtuous economic cycle, with higher wages boosting consumer spending power across communities.
The 24th October announcement will confirm precise new rates for both the UK and London, along with implementation timelines for accredited employers. For policymakers watching from Westminster, this voluntary initiative continues to demonstrate how market mechanisms can address poverty pay without regulatory intervention—though critics argue it highlights gaps in statutory protection for Britain's lowest-paid workers.