More than 16,000 UK employers have now voluntarily signed up to pay a Real Living Wage to indicate their commitment to paying their employees a rate which reflects the actual cost of living. With new rates just announced for 2025–26, almost half a million workers employed by organisations signed up to the scheme are set for a pay rise.
But what exactly is the Real Living Wage, and how is it different from the Government’s minimum wage? And more importantly, what does this mean for your business?
What is the Real Living Wage?
The Real Living Wage is a voluntary rate set by the Living Wage Foundation, based on what people actually need to live on, including rent, bills and food.
Not to be confused with the Government’s National Minimum Wage and National Living Wage, it’s reviewed every year and is higher than the Government’s legally binding rates.
It applies to all workers aged 18+, not just those over 21 or 23 (as per statutory minimums).
New Real Living Wage Rates (2025–26)
Announced in October 2025, these new rates must be implemented by 1 May 2026 at the latest:
- £14.80 per hour in London (up 95p from £13.85 – a 6.9% rise)
- £13.45 per hour across the rest of the UK (up 85p from £12.60 – a 6.7% rise)
What’s the difference between the Real Living Wage and the National Living Wage?
| Wage Type | Rate (from April 2025) | Who sets it? | Age Applies To |
| Real Living Wage | £13.45 / £14.80 | Living Wage Foundation | 18+ |
| National Living Wage | £11.44 (2025–26) | UK Government | 21+ |
So, a full-time employee paid the Real Living Wage would earn:
- £2,418 more per year than someone on the National Living Wage
- £5,050 more in London
Why are more employers signing up?
One in seven UK workers is now employed by a Living Wage Employer, including:
- Half of the FTSE 100
- Brands like Ikea, Burberry and Aviva
- Thousands of small and medium-sized businesses
- Employers committing to pay not just staff, but also third-party contractors (cleaners, security, etc.)
The benefits go beyond branding or ethics:
- Better retention and morale
- Easier recruitment
- Lower absenteeism
- And stronger employer reputations in tough markets
What does this mean for your business?
You don’t have to be a Living Wage Employer but if you’re considering it, now is a great time to review your pay structure. Of course, if you already consistently pay above the Living Wage, being registered with the scheme is a no brainer!
Even if you're not officially accredited, understanding how your pay compares to the real cost of living is a helpful benchmarking tool.
You may want to ask:
- Are we competitive in attracting and keeping talent?
- Could this reduce turnover or increase performance?
- What are the cost implications, and what support do we need?
Want to understand your options?
We help businesses explore this decision from both a commercial and HR compliance perspective, whether you're thinking of becoming accredited or just want to check your current approach.
Email info@enlightenhr.com or call 07432 203979 to book a free 30-minute consultation.
Holly Mapstone is an HR expert and specialises in helping those of you in the SME sector with all of your HR needs.
Consultancy allows Holly to be agile and to adapt her style and support to suit the needs of her clients. Building strong working relationships allows Holly to deliver improvements, while also aligning people strategy to business outcomes and promoting resilient and positive cultures.
Need Advice?
If you need a hand with any of this, or anything else when it comes to the people and practices in your business, we’d love to help. We are always happy to debate the pros/cons, dos/don’ts with you so please do talk to us if we can help in any way, we are here to support you. Just give us a call and arrange a free consultation. You can talk to Holly directly on 07432 203979 or email info@enlightenhr.com
