London Living Wage 2020: What is the London Living Wage? | Personal Finance | Finance

Unlike the minimum wage, which is designed only to account for food and housing, the living wage takes into consideration other essential needs like clothing and other basic necessities. The goal of a living wage is to allow workers to earn enough to prevent them and their family falling below the poverty line.

What is the London Living Wage?

The Government website states: “The London living wage is calculated to independently reflect the high cost of living in the capital, giving a worker in London and their family enough to afford the essential and save.

“However, organisations must choose to pay their employees the London Living Wage – higher that what they are required to pay by law.

“This is why the Mayor of London is championing the benefits of the Living Wage – to the lives of Londoners and to your business – and encouraging employers to opt in.”

The real living wage is an independently calculated wage rate which aims to be slightly higher than the cost of living in the UK, and London in particular.

This is calculated by the Living Wage Foundation and takes into account rental costs, council tax, public transport or travel costs and shopping.

The Government states: “The minimum wage a worker should get depends on their age if they’re an apprentice.

“The National Minimum Wage is the minimum pay per hour almost all workers are entitled to.

“The National Living Wage is higher than the National Minimum Wage – workers get it if they’re over 25.

“It does not matter how small an employer is, they still have to pay the correct minimum wage.”

You can use the minimum wage calculator to see if the correct wages are being paid out.

The Government has promised the National Living Wage will rise to more than £10.50 an hour in 2024, compared to the £8.21 workers are currently paid.

The new rate will apply to everyone aged 21 and over, as opposed to 25, which is the current policy.

While the new rates are welcomed by people on minimum and living wage rates, they will not apply to the self-employed.

The TUC (Trade Union Congress|) estimates that half of adults 25 and over, who are self-employed, earn less than the minimum wage – equating a total of 2million people.

Chancellor Rishi Sunak announced the move in his Budget, which was delivered early March.

Mr Sunak said: “It was a Conservative government that in 2016 introduced the national living wage, giving Britain’s lowest-paid workers the biggest pay rise in 20 years.

“And in just three weeks’ time, about 2million workers will see their wage rise again by 6.2 percent – for a full-time worker, that’s a pay rise of almost £1,000. This is the biggest cash increase ever,

“As long as economic conditions allow, by 2024 the National Living Wage will reach two-thirds of median earnings. We promised to end low pay – we’re getting it done.”

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