The voluntary real living wage in the UK increased to £13.45 per hour outside London on October 22, 2025. This marks a 6.7% rise from the previous rate. In London, the rate rose to £14.80 per hour, a 6.9% increase. Announced by the Living Wage Foundation, these new rates apply to workers aged 18 and over at more than 16,000 accredited employers. Employers must implement the changes by May 1, 2026.
The adjustment aims to address rising living costs, benefiting nearly 460,000 low-paid workers in sectors such as retail, hospitality, cleaning, finance, and manufacturing. The real living wage is calculated independently by the Resolution Foundation based on essentials like housing, food, utilities, childcare, and emergency savings. This differs from the government’s mandatory national living wage, which stands at £12.21 per hour for those aged 21 and older as of April 2025.
Projections indicate the national living wage will rise to about £12.71 per hour in April 2026, a 4.1% increase, to maintain it at two-thirds of median earnings. For a full-time worker on a 35-hour week, the new real living wage provides £2,418 more annually outside London compared to the current national living wage. In London, the gap exceeds £5,050 per year.
Since its launch in 2011, the real living wage initiative has delivered over £4.2 billion in additional earnings to low-wage workers. Accredited employers, including major firms like IKEA, Aviva, and Linklaters, report improved staff retention, lower turnover, and higher productivity. Katherine Chapman, executive director of the Living Wage Foundation, highlighted that the rates help workers cope with costs and urged more businesses to join.
However, wage increases can pressure businesses, especially small ones facing inflation and weak growth. Without matching productivity gains, such rises may lead to higher prices, reduced hiring, or smaller pay bumps for mid-level staff. Despite being voluntary, the real living wage adds to broader labor cost challenges in the UK economy
