Formed by the Living Wage Foundation, the real living wage is a voluntarily hourly wage that’s calculated by economists at the Resolution Foundation. It factors in the costs of housing, food, travel, as well as smaller expenses that contribute to a higher standard of living, like meals out or school uniforms. At the moment, 16,000 UK businesses have opted in to pay their employees the real Living Wage—this has meant nearly half a million employees are receiving better pay. It’s important to distinguish between National Minimum Wage and the National Living Wage, which are statutory requirements. The real Living Wage across the UK is £13.45, and £14.80 in London. Employees benefit from better pay, whilst employers are seen to be responsible and reputable.
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The real Living Wage, created by the Living Wage Foundation, is a voluntary hourly wage that’s based on the actual cost of living. At present, more than 16,000 UK businesses voluntarily pay their employees the real Living Wage.
This equates to almost half a million employees receiving improved pay to help cover risings costs.
Before discussing what is the real Living Wage in 2025/2026, there are other important wage rates in the United Kingdom like the National Minimum Wage and the National Living Wage. Let’s explore and explain them below.
What is minimum wage?
Minimum wage in the United Kingdom, which also include the National Living Wage (this applies to those 21 and over), sets out varying hourly rates according to age. Here’s the key information:
Apprentices in their first year, or under 19, earn £7.55 an hour.
Those under 18 receive an hourly rate of £7.55. They must be over the Compulsory School Age.
If you’re age 18-20, the hourly rate is £10.00.
It is set by a negotiated settlement as per recommendations from businesses and trade unions. It is a legal requirement that employees are paid the National Minimum Wage.
Recently, the government ‘named and shamed’ over 500 employers who failed with their legal obligation.
What is the National Living Wage?
In the United Kingdom, as of April 2025, the National Living Wage is £12.21—this applies to anyone who’s ages 21 and over.
Apprentices that are over the age of 21 and have completed the first year of their course will be entitled to a minimum hourly rate of £12.21.
All hourly rates are subjects to change on the 1st of April every year, but there is no London weighting applied.
How much is the real Living Wage?
London weighting is applicable to the real Living Wage, with it sitting at £14.80 in the capital, and £13.45 across the United Kingdom—a 6.9% and 6.7% increase, respectively.
If you’re over 18, and if your employer decides to participate, you’ll be eligible for the real living wage.
How is it set? The rate is calculated by economists at the Resolution Foundation. It considers costs of housing, food, travel, as well as smaller expenses that facilitate a better quality of life.
When does minimum wage go up?
The New National Minimum Wage rates have been announced and will come into effect in April. At the time of writing, the National Minimum Wage (for 18-20 year olds) is £10 with a new rate in 2026 of £10.85.
Those aged between 16 and 17 will go from being on £7.55 per hour to £8.00 or hour, whilst the apprentice rate will change from £7.55 to £8.00.
Workers over the age of 21 who are entitled to the National Living Wage will see their hourly rate increased from £12.21 to £12.71.
FAQs: What is the real Living Wage?
How can a business become a real Living Wage employer?
Businesses must voluntarily agree to pay their employees the real living wage. They can apply for accreditation through the Living Wage Foundation and must pay all their directly employed staff the real Living Wage, with a plan to extend it to contracted staff.
Why should a business pay it?
It demonstrates that companies are responsible and fair. Also, employees will feel valued, meaning better retention.
Who pays it now?
From household names to SMEs, over 16,000 businesses have been accredited.
Final say: What is the real Living Wage?
Not to be confused with the National Minimum Wage and living wage, which are statutory, the real Living Wage is a voluntary hourly rate.
Headed by the Living Wage Foundation, its objective is to provide a fairer wage for workers, combatting rising inflation.
Whilst it benefits employees, businesses who become accredited demonstrate they care about their workforce and are seen as responsible and reputable.
Get expert advice on the real Living Wage with Peninsula
If you’re an employer and you’re unsure about the law surrounding National Minimum Wage and Natonal Living Wage, our advisors would be glad to offer their expertise. Likewise, if you’d like advice on the real Living Wage, Peninsula’s ready to help you.
Peninsula offers quality advice on all things relating to wage. Our teams offer 24/7 HR advice which is available 365 days a year. We take care of everything when you work with our HR employment team.
Want to find out more? Contact us on 0800 028 2420 and book a free consultation with a HR consultant today.
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