The Living Wage Foundation said it had started the annual increase two months earlier than planned and had proposed its biggest single increase in recognition of the intense pressure on households from soaring energy prices and the highest inflation in 40 years. The Living Wage – paid by more than 11,000 employers including Aviva, Ikea, Burberry and Lush – will rise by £1 to £10.90 an hour across the UK and by £90m to £11.95 a day time in London. Calculated based on what people need to live, the rate is higher than the national living wage of £9.50 set by the government for workers aged 23 and over. The Living Wage Foundation said the 10.1% rise for workers outside London was the biggest in its 11-year history. Inflation in the UK rose above 10% in July for the first time since the early 1980s, fueled by rising petrol prices and energy bills, as well as the rising cost of a weekly shop. The nominal rate eased slightly to 9.9% in August, although it is expected to rise further in October following a sharp rise in energy bills. The announcement comes as average wage growth across the UK has failed to keep pace with the rising cost of living, with workers taking the biggest hit in real terms on average pay in a 20-year record. Annual growth in regular wages was 5.5% in the quarter to June – stronger than before the pandemic as companies struggled to hire workers, but still well below the rising pace of inflation. Some workers benefited from stronger pay growth than others. While public sector workers have seen wages rise by an average of 2%, private sector workers have had increases of 6% – the largest difference on record. An estimated 4.8 million workers in Britain are paid less than the real living wage and there is evidence of an increase in workers skipping meals and using food banks. Katherine Chapman, director of the Living Wage Foundation, said: “With the cost of living rising so fast, millions of people are facing a dire choice to keep warm or eat this winter – which is why a real living wage is more vital than ever. Today’s new rates will give hundreds of thousands of workers and their families greater security and stability in these incredibly difficult times. “We are facing unprecedented challenges with the cost of living crisis, but businesses are continuing to step up and support workers by writing the daily wage in record numbers. We know the living wage is good for both employers and workers, so the real living wage must continue to be at the heart of solutions to tackle the cost of living crisis.”
