Understanding the Real Living Wage in the UK
The Real Living Wage: Good for People. Good for Business.
At Barnett & Co Accountants, we believe that fair pay is not only a matter of legal compliance, but a foundation for building stronger businesses and healthier communities. As discussions around wages continue to evolve, it is important for employers and employees alike to understand the significance of the real Living Wage in the UK.
What Is the Real Living Wage?
The real Living Wage is an hourly wage rate calculated based on the actual cost of living, including essentials such as rent, food, and transport. Unlike the government's National Minimum Wage and National Living Wage, the real Living Wage is set independently by the Living Wage Foundation. It is a voluntary commitment that reflects what individuals need to earn to maintain a decent standard of living.
As of April 2025, the rates are:
£12.60 per hour across the UK (outside London)
£13.85 per hour within London
These figures are updated annually, ensuring that the rate keeps pace with changes in living costs.
Why Does the Real Living Wage Matter?
While the government's National Living Wage for those aged 21 and over currently stands at £12.21 per hour, studies show that many workers earning only the statutory minimum struggle to meet basic living expenses. By contrast, the real Living Wage enables workers to cover essential needs, reducing financial stress and promoting overall wellbeing.
For businesses, paying the real Living Wage offers numerous benefits:
Increased employee motivation and retention: Staff who feel valued are more likely to stay loyal and perform at a higher standard.
Enhanced reputation: Being recognised as a fair employer strengthens brand image and builds trust with customers and the wider community.
Social impact: Supporting fair pay contributes to reducing poverty and promoting economic stability across the UK.
Employer Participation
Over 15,000 employers across the UK, including well-known brands and small businesses alike, have voluntarily committed to paying the real Living Wage. Accreditation from the Living Wage Foundation signals a strong commitment to ethical employment practices.
In sectors such as hospitality, retail, and social care, where low pay is common, adopting the real Living Wage can be a powerful differentiator.
How Barnett & Co Can Help
At Barnett & Co Accountants, we advise businesses on all aspects of payroll compliance, employee remuneration strategies, and the financial planning required to transition towards becoming a real Living Wage employer.
We can assist you with:
Wage benchmarking and budgeting
Payroll management and compliance
Real Living Wage accreditation support
Staff financial wellbeing initiatives
Paying a fair wage is not only the right thing to do—it is a sound investment in your business's future.
Contact Us
If you are considering becoming a real Living Wage employer or need assistance understanding your obligations and opportunities, Barnett & Co Accountants are here to help.
Email: info@barnettandco.uk
Phone: 0345 646 1516
Address: Electra House, Electra Way, Crewe, CW1 6GL
