Living Wage Foundation: rise in real living wage rates

Today (Monday 5 November) the Living Wage Foundation has announced that there will be a rise in the national real living wage to £10.55 in London and £9.00 everywhere else.

On the subject, Adam Williamson, head of professional standards at the Association of Accounting Technicians (AAT), has said: “[The] announcement from the Living Wage Foundation may only currently affect a few thousand firms, and yet the Foundation could provide the government’s Low Pay Commission with the answers they are looking for when trying to meet their ‘aspiration to end low pay’, as set out by chancellor Philip Hammond in last week’s Budget.”

AAT is among the 4,500 businesses that has Living Wage accreditation and they have highlighted their belief that that far day’s work should be rewarded with a fair day’s pay.

The Living Wage Foundation has revealed that the wage increase has been largely prompted by increasing transport costs, rents, and council tax. This will lead to some 180,000 workers securing an “inflation-beating” pay rise. However, whilst the charity has voiced a belief that these new rates should be introduced immediately, UK Living Wage companies have been given until Spring 2019 to bring in these changes.

This can be slated as another huge change that awaits the country in the spring of next year, along with Making Tax Digital (MTD) and, of course, Brexit.

Williamson continued: “While the chancellor announced last week that the National Living Wage will increase to £8.21 an hour in April 2019, this new rate only applies to over-25s. There are four lower wages incorporating other wage brackets – from £7.70 per hour for 21 to 24-year-olds down to just £3.90 per hour for apprentices.”

When discussing this topic with members of AAT, Williamson concluded that “over half would like to see these five rates replaced with a single, one-size fits all minimum wage.”

“The £9 Living Wage is set independently and calculate annually, according to the basic cost of living using the UK’s ‘Minimum Income Standard’,” said Williamson. “While those employers, including AAT, who have Living Wage Foundation accreditation are going above and beyond their legal requirements by paying the Living Wage, it sets a strong tone – not only to employees but to customers, suppliers, and other stakeholders.”

Although these wage rises will be of a benefit to the UK’s working population, KPMG has recently cited the concerning statistic that 22% of jobs now pay less than the real Living Wage, and this is up from 21% in 2017. Furthermore, those aged until 25 – or those studying an apprenticeship – will not see as many benefits. AAT believes that accountancy firms have a responsibility to their staff to ensure they are paid a fair wage.

“With a third of AAT’s student population being aged until 25, and with over 10,000 studying apprenticeship schemes, we support the National Union of Student’s description of the apprenticeship wage as ‘exploitative’ and believe they should also receive the standard minimum wage,” Williamson added.

It is becoming incredibly difficult for young people to find work in this unstable economic climate – lower wages until they turn 25 is a discrepancy that really should be considered going forward.

AAT’s head of professional standards concluded: “All businesses, large and small, should consider signing up to the Living Wage to help eradicate low pay and act to the benefit of students, apprentices, small business owners, skilled workers, and many other employees.”

The months ahead look uncertain; the best way to combat this would be to ensure that every UK business has a productive, hardworking, and fairly paid workforce.