Real Living Wage: What is it? Why pay it? And why we pay it

Apr 11, 2023

The National Minimum Wage, the National Living Wage – you’ve more than likely heard of these schemes, you’ve probably even been paid them. So, you’ll be well aware that they really aren’t all that…

The sad reality is that neither are based on the true cost of living, which is a real problem – especially in a cost of living crisis. The good thing, however, is that the Real Living Wage is.

Here’s everything you need to know.

What’s the Real Living Wage?

As of April 2023, the Real Living Wage is £10.90/hour in all parts of the UK but London, where it's £11.95/hour. It’s the only UK pay rate that’s calculated according to the cost of living, based on the price of various household goods and services.

Driven by an independent, voluntary movement of businesses and people in the UK, there are over 12,000 Living Wage employers, including IKEA, Burberry, Everton FC and yours truly.

While the UK government’s National Minimum Wage (£10.18/hour for people aged under 23) and National Living Wage (£10.42.hour for people aged over 23) are enforced by law, they’re more reflective of what’s affordable to businesses than what employees and their families need to live.

The Real Living Wage, on the other hand, is for anyone aged 18 and older and is calculated every year to meet the real – and rising – cost of living in the UK.

What’s the London Living Wage?

The London Living Wage is the Real Living Wage but for, well, London. Instead of being £10.90/hour it’s £11.95/hour, covering all boroughs of Greater London.

Whereas the Minimum Wage and National Living Wage have no London weighting, the Real Living Wage does. And it’s for very good reason: living in London is a lot more expensive than living in the rest of the UK.

Why should a business pay the Real Living Wage?

Because your workers deserve a wage that meets their everyday needs. The Real Living Wage empowers people on your payroll with less stress, greater financial security and simply more time to spend living (pun intended).

But, in the nicest possible way, it’s not all about them. Businesses have been proven to gain a lot from paying their workers the Real Living Wage – beyond it being the right thing to do, of course.

The Living Wage Foundation – the organisation behind the movement – tells us that 75% of adopters say the Real Living Wage has increased motivation and retention rates among employees, with BrewDog reporting a 40% fall in retail staff turnover in the year after joining the movement.

With 90% of consumers believing that pay should reflect living costs and 93% of university students wanting to work for Living Wage employers, joining the movement can have a big impact on a business’s reputation and future.

It’s no surprise then that 86% say it’s improved what people think of their business.

Why does Packfleet pay the Real Living Wage?

Technically we don’t – we pay all of our employees above the London Living Wage. To us, doing this is particularly important because of the industry we’re in.

Far too often the people out on the roads delivering parcels are paid far too little, which isn’t right and is a big reason why the quality of service in the delivery industry has declined so much.

We want to change this for our drivers, the people who are the face of Packfleet. They do a really tough job and deserve to be properly compensated for it, which is why we’re very proud to be part of the Real Living Wage movement.