Recent living wage accredited employers include the National Theatre, Queen’s University Belfast and Barts NHS Trust.
These employers joined companies such as the retailer Ikea, the insurer Aviva and the fashion brand Fred Perry, who already pay their staff the living wage.
The real living wage (RLW) is a voluntary wage rate that is independently calculated by economists at the Resolution Foundation thinktank, on behalf of the Living Wage Foundation charity. It is based on the cost of living, accounting for essentials like housing, food, travel but also small discretionary expenses such as a meal out for a child’s birthday or school uniform at the start of term.
The RLW currently stands at £12.60 per hour across the UK and £13.85 per hour in London to reflect the city's higher living. It differs to the government's national living wage, which is the legal minimum all UK employers must pay to workers aged 21 and above (£12.21 per hour from April 2025). The RLW is paid by accredited Living Wage accredited employers to their employees.
There is clear evidence that moving to the RLW is not a cost, it is an investment, explained Brian Whittaker, people and organisational development director at accredited living wage employer Brunelcare, a charity providing housing, care and support.
He told HR magazine: “Our KPIs demonstrate huge improvements in retention, and this leads to better productivity, service levels and efficiency. In terms of financial outputs, our net contribution – our profit – has increased by a factor of five, with no significant increase in top line earnings.
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“In regard to steps to take, it requires a clear and objective business case being presented to the guiding mind of any organisation such as the CEO, board members and shareholders. If approved, it may take more than one financial year to get there, depending on the starting point. Our trustees approved the adoption of the RLW in December 2019. We moved incrementally towards it, getting there in April 2022.
“We developed our people strategy in 2019 and launched it in 2020. Moving to the RLW was just one of a range of improvements contained within the strategy. The strategy included the business case, the budget implications and the expected return on investment. It is essential to provide as much evidence as possible to allow decision-makers to feel that this is a solid investment and not a gamble.”
Becoming an accredited employer has led to improvements, Whittaker added, such as reduced turnover, reduced levels of vacancies and a positive impact on employee engagement.
For employers who are considering becoming accredited, the first step is to assess the company’s values, said Brett Mendell, managing director of textile manufacturing company Thomas Kneale.
Speaking to HR magazine, he said: “If you believe in paying people fairly and being a responsible employer, it’s a natural step. The process itself was straightforward: we reached out to the Living Wage Foundation, reviewed our pay structure, made adjustments where needed and completed the accreditation without difficulty.
"We believe everyone should earn enough to live on; it’s the right thing to do, and it makes business sense too. We are also 'living hours' accredited, because a fair hourly rate is no use if shifts are cancelled at short notice or staff don’t get enough hours to live off.”
A study by Cardiff University Business School, in conjunction with the Living Wage Foundation, published on 15 May, highlighted that since 2011, the RLW has given over £3.8bn back to Britain’s lowest paid workers, with 15% of workers receiving an hourly pay increase of 20% or more.
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Researchers at Cardiff Business School also found that the living wage movement has delivered positive benefits to employers, such as improved HR outcomes. This included improved staff recruitment and retention, increased employee motivation and greater opportunities for employees to develop their skills.
Antoinette Daniel, founder of ethical cleaning company Just Helpers, urged employers who are considering becoming accredited not to hesitate.
Daniel told HR magazine: “The benefits go far beyond the bottom line. Paying the RLW means we have a team that’s loyal, stable, and thriving, not just surviving. That leads to lower recruitment costs, better continuity for clients, and a happier workforce.
“The cleaning industry doesn’t have to be one that traps women in low-paid, insecure work. It can be a vehicle for change. By paying decent wages and offering fair conditions, we can build a sector that truly values the people at its heart.”
Cardiff University Business School researchers analysed a database of 20,000 living wage employers. The Living Wage Foundation was founded in 2001 by Citizens UK.
