UK Real Living Wage increases to £14.10 per hour

The Living Wage Foundation has announced an increase to the voluntary Real Living Wage, affecting nearly 500,000 workers across the United Kingdom. The hourly rate will rise by 65p, bringing the rate outside of London to £14.10 and the London rate to £15.45. This increase is expected to provide full-time workers with over £1,250 in additional annual gross earnings.

While the increase benefits employees of approximately 17,000 accredited companies, employers have until May 1, 2027, to implement the new rates. The Living Wage Foundation noted that the rate is calculated based on the cost of everyday essentials rather than the statutory National Living Wage set by the government.

Concurrently, the Bank of England is monitoring wage growth as a factor in inflation management. Policymaker Megan Greene indicated that pay settlements for 2027 are expected to remain around 3.5%, suggesting limited wage disinflation. Additionally, Chief Economist Huw Pill expressed skepticism regarding market forecasts that predict four consecutive interest rate hikes in the coming year.