Living wages help support workers with their basic needs such as food, housing and other essentials. With the way the pandemic left things, many people have become reliant on the national living wage to cover their expenses. Following recent changes to the price of living wages. Many are worried about being thrown out onto the streets. However, we are here to guide you on how schemes can increase your employees’ wages. So that your employees can work stress-free and become more motivated.
Their living wage is an hourly rate calculated according to the basic cost of living in the UK. It is a voluntary wage which means it is optional for employers to pay it. Although London has its own living wage. A fair living wage is an income earned during normal working hours that meets the basic needs of workers and their families, with some leftover for extra expenses or savings.
The government introduced a higher minimum wage for employees over 25 years old in 2016. This was calculated based on the target to reach which was 66% median earnings by 2024. Plans had been made that from 2021 it will include over 23 years and this figure will increase to £10.50 an hour by 2024. To improve wages for all workers, several features need to be considered, including statutory minimum wage, social protection, bonuses, skill and performance recognition.
Why it is important
The living wage is important because it could help increase the business to have a stronger workforce. Employees are more likely to be more productive, have less retention and reduce absences. It can also help reduce government spending. For those who rely on benefits to survive, by having a living wage they would not have to rely on benefits.
The living wage has the ability to attract higher quality staff and an enhanced reputation as a socially responsible employer.
The recognition of living wage helps promote fairness and equity which attracts more skilled employees. This will boost the capability of the workforce offering the potential for further rather than more basic training and development.
The capability to recruit and retain staff has never been more vital. Businesses could use the living wage scheme to attract young employees that have experience and help the business grow. By providing higher pay it would mean stall loyalty, engagement increases and reduced turnover. As a result, the business would attract more people to work for them. Since the start of the pandemic in 2020, employers have continued to sign up for a real living wage.
Schemes to increase the living wage
The campaign for the living wage
The campaign started in 2001 by Citizens UK which included communities across the country to campaign about wages that can help with living costs. It originally started in east London where people were having issues with low pay.
Faith leaders, trade unions and community organisations combined together to demand on major employers to pay all staff including those contracted through a third party discussing a wage they could survive on. The living wage foundation was established in 2011 by Citizen UK to help promote the living wage. The campaign was supported by the Mayor of London, including Boris Johnson and Sadiq Khan. The living wage has benefitted more than 220,000 for those who have problems with low pay.
National living wage to increase by 2024
From April 2021 the National Living Wage will rise by 2.2% from £8.72 to £8.91, and to over 23 year-olds for the first time. By 2024 the government expects the National Living Wage will reach two-thirds of median earnings. The rise will help support millions of families in the UK.
The living wage increase
The real Living Wage rates for 2020/21 have been announced as £9.50 in the UK and £10.85 in London. The Real Living Wage is independently calculated, voluntary and based on the cost of living. The Living Wage rate applies to all employees 18 years and over. Since the start of lockdown, approximately £200 million have been spent on extra wages for workers.
How we can help
If you require further HR support, Happie Group will be happy to help you. We even handle HR paperwork on behalf of your company. Please contact us via email at sales@happiegroup.com or call us on 02075376631.