What is the difference between the Living Wage and the Government's 'National Living Wage'
Inspired by the campaign for a real Living Wage, in April of 2016 the UK Government introduced a higher statutory minimum wage rate for all workers aged 25 and over which they called the ‘National Living Wage’. In 2021, the age threshold was lowered to include workers aged 23 and over.
The Government's 'National Living Wage', or minimum wage rate is separate to the Living Wage rate calculated by the Living Wage Foundation. Unlike the Living Wage Foundation's real Living Wage rates, it is not independently calculated according to the cost of living, and is therefore lower than what people need to afford a decent standard of living.
As of the 21st November 2023, the Government announced their new 'National Living Wage' rate for 2024 would increase to £11.44 an hour. This new rate came into effect on April 1st 2024.
The 'National Living Wage' is £1,092 per year short of the Living Wage Foundation's real Living Wage. The difference could pay for 18 weeks of food for a household, or 12 weeks of housing and energy costs.
Workers in London paid the National Living Wage would need well over £3,000 (£3,334.50) extra to bring earnings in line with the London Living Wage. The difference could pay for almost a year’s worth (49 weeks) of food, or 23 weeks of housing and energy costs.
From April 2024, the National Living Wage will apply for workers aged 21 and over, as opposed to 23 and over as previously. But this means that 18–20-year-olds, many of whom are living away from home and working full-time, are still at risk of being paid just £8.60 per hour. The real Living Wage, set by the Living Wage Foundation, applies to all workers 18 and over.
Find out more about the Government's National Living Wage rates.