Living Wage definition
The Living Wage figure is updated annually based on a range of economic factors and is set independently by the Centre for Research in Social Policy at Loughborough University. It is calculated to ensure that a worker being paid the living wage can afford the basic cost of living in the UK. The Living Wage has broad cross-party support in the United Kingdom
The London Living Wage, as of 2014, is £8.80 an hour – this drops to £7.65 an hour outside of London. This is well ahead of the current National Minimum Wage at £6.31.
The Living Wage is not mandatory but employers make a pledge to pay the living wage as a minimum, often as part of corporate social responsibility policies. According to the Living Wage Foundation, more than 80% of employers believe the Living Wage had enhanced the quality of the work of their staff, with associated falls in absenteeism of 25%. A further 70% of employers felt the Living Wage had increased consumer awareness of their organisation’s commitment to be an ethical employer.
The Living Wage Foundation offers an accreditation scheme to raise awareness of employers that have publicly committed to pay the Living Wage. Many of the country’s biggest employers have been accredited, including Barclays, Deloitte, Nationwide and Transport for London. Employers accredited by the Living Wage Foundation have six months from when the new Living Wage is announced each year to implement the rise.