A Real Living Wage pay boost is on its way to thousands as the 2025 national Living Wage rate increases - here’s what to expect
More than 16,000 employers across the UK have signed up to pay staff the new Living Wage rate đź’·
Around 460,000 UK workers on the voluntary Real Living Wage will see a 6.7% pay rise this year
The hourly rate is increasing to ÂŁ13.45 nationwide and ÂŁ14.80 in London, outpacing inflation
A full-time worker on the Real Living Wage will earn £2,418 more a year than someone on the Government’s minimum wage
Over 16,000 employers, including IKEA and Nationwide, now pay the Real Living Wage to staff and contractors
The rise highlights the growing gap between the voluntary Real Living Wage and the legal National Living Wage
A significant pay boost is on its way to nearly half a million workers across the UK this year as the voluntary Real Living Wage rises by up to 95p an hour - outpacing both inflation and the Government’s minimum wage increase.
The Real Living Wage, which is independently calculated each year by the Living Wage Foundation, is going up by 85p to ÂŁ13.45 an hour across the UK and by 95p to ÂŁ14.80 in London, representing rises of 6.7% and 6.9% respectively.
That means a full-time worker on the Real Living Wage will take home £2,418 more per year than someone on the Government’s National Living Wage, and £5,050 more in London.
What is the Real Living Wage?
The Real Living Wage is a voluntary hourly pay rate based on the actual cost of living, not what the law requires. It’s calculated each year to reflect what workers need to cover essentials like rent, energy, food, and transport.
Unlike the Government’s National Living Wage, which is set by ministers and applies to everyone over 21, the Real Living Wage is opt-in.
Employers who sign up with the Living Wage Foundation promise to pay at least this rate to all staff and contracted workers, including cleaners and security guards.
More than 16,000 employers have now joined the scheme, from big names like IKEA, Nationwide, and Oxfam to thousands of small businesses and charities. Around one in seven UK workers are now employed by an accredited Living Wage employer.
How much difference does it make?
For those on lower incomes, the change is meaningful. Earning ÂŁ13.45 instead of the ÂŁ11.44 National Living Wage adds up to hundreds of pounds extra in take-home pay every month, money that could help cover food, bills, or childcare.
The Living Wage Foundation’s executive director Katherine Chapman said: “We all need a wage that covers life’s essentials, and the Real Living Wage is the only UK rate based solely on what people actually need to live.
“These new rates will make a massive difference to workers and their families, helping them better cope with rent, bills, food and other essentials.”
Even as inflation slows, costs remain stubbornly high, especially for food and housing. Many Real Living Wage employers say paying the higher rate boosts staff retention and morale, meaning fewer vacancies and better service for customers.
What does it mean for those not on the Real Living Wage?
This year’s rise comes amid continuing pressure on low-paid workers, with around 4.5 million people still earning less than the Real Living Wage.
Christina McAnea, general secretary of the public service union Unison, said the new rates “set a clear benchmark for the rate of pay needed to keep workers out of poverty”.
She warned that many public sector staff, including NHS cleaners and porters, are still paid below that threshold, risking an exodus to private sector employers who pay more.
“Workers can’t give their all for the public if they’re unable to meet the bills and feed their families,” she said.
What it means for your money
If you’re one of the 460,000 workers on the Real Living Wage, expect a noticeable uplift in your next pay packet as accredited employers roll out the new rates in the coming months.
If not, this increase could still affect you indirectly. As more employers adopt the Real Living Wage, competition for staff could push up pay rates in sectors like retail, cleaning, hospitality, and care work, particularly where shortages remain.
While it’s not a legal requirement, the Real Living Wage continues to set the moral and financial benchmark for what a fair day’s pay looks like in modern Britain.
