Voluntary living wage above £10 in London

Wage growth is failing to keep pace with the rate of inflation in the UK economy currently

Around 150,000 workers are to get a pay rise – with those eligible in London now receiving above £10 per hour for the first time, according to the body behind the voluntary living wage.

The Living Wage Foundation, which sets the so-called "real living wage", said it would go up by 45p per hour to £10.20 in London and by 30p to £8.75 in the rest of the country.

It said the increases represented a 4.6% rise in the capital and 3.6% elsewhere – above the official rate of inflation currently at 3% – with higher inflation, rising housing rents and transport costs all reflected in the rises.

The scheme aims to set a pay rate that meets the actual cost of living. Its runs above statutory Minimum Wage and National Living Wage rates – the latter currently standing at £7.50 per hour.

Mark Carney is the governor of the Bank of England
Carney sees little rate rise strain

Any increase will be helpful – especially after the Bank of England raised borrowing costs through an interest rate rise to combat higher inflation last week.

Living Wage Foundation director, Katherine Chapman, said: "The new rates will bring relief for thousands of UK workers being squeezed by stagnant wages and rising inflation.

"It's thanks to the leadership of over 3,600 employers across the UK who are committed to paying all their staff, including cleaners and security staff, a real living wage.

"Great businesses know that, even during these tough times, not only is fair pay the right thing to do but paying the real living wage brings big benefits.

'Minimum wage is not enough'

"Nine out of 10 accredited living wage employers report real benefits including improved retention, reputation, recruitment and staff motivation."

The Foundation said Heathrow was among 150 organisations to have joined its ranks in recent times – the airport's parent firm agreeing to pay all its workers at least the voluntary rate by 2020.

TUC general secretary, Frances O'Grady, welcomed the new rate but added: "More companies need to sign up. Profits in the UK are at record levels, yet many bosses are still refusing to invest in their staff."

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