What is the Real Living Wage?
The Real Living Wage is a voluntary pay rate set each year by the Living Wage Foundation. It's based on the cost of living rather than a legal requirement, and employers choose to sign up and pay it. It applies to workers aged 18 and over.
It's not the same as the government's National Minimum Wage, which is the legal minimum employers must pay.
The new rates
Outside London
The rate is £14.10 an hour, up 65p (4.8%). Working 37.5 hours a week for 52 weeks, that's about £27,495 a year.
In London
The rate is £15.45 an hour, also up 65p (4.4%). On the same hours, that's about £30,127.50 a year.
For a full-time worker, the rise is worth around £1,267.50 more a year than the previous rate.
How does it compare with the minimum wage?
The government minimum wage for people aged 21 and over is currently £12.71 an hour, and £10.85 for those aged 18 to 20. Based on those rates, a full-time worker on the new Real Living Wage would earn around £2,710 more a year outside London and about £5,343 more in London.
The next minimum wage rates, due in April 2027, are expected to be confirmed around the Budget on Wednesday 28 October.
Who benefits?
Almost half a million workers are set to see a pay boost. Close to 17,000 employers have signed up to the scheme, including household names such as Ikea, Uniqlo and Everton FC.
Employers are encouraged to apply the new rate as soon as possible, although they have until 1 May 2027 to do so.
Why it matters
The Living Wage Foundation's research suggests many low-paid workers are still struggling. It found that 61% had cut back on food or heating, fallen behind on bills or housing payments, or taken out a payday loan to cover essentials in the past year, and 37% had used a foodbank.