Research from Loughborough University is behind the announcement today (Monday 3rd November) that the UK Living Wage rate has been set at £7.85 per hour, an increase of 20p on the 2013 rate.

The UK Living Wage rate (ie outside London) is calculated annually by the Centre for Research in Social Policy (CRSP) at Loughborough University.

To calculate the Living Wage CRSP research focuses on identifying the goods and services that households need in order to have a minimum acceptable standard of living, according to members of the general public.  The Living Wage is then worked out by calculating how much people need to earn in order to pay for the goods and services and therefore reach a minimum standard.

The uprating of the Living Wage figure each year takes account of rises in living costs and any changes in what people define as a ‘minimum’.  It also takes some account of what is happening to wages generally.

The rise in the Living Wage will improve the take home pay of 35,000 workers across the country who are employed by over 1,000 businesses that are accredited Living Wage employers.

Donald Hirsch, Director of CRSP comments:  At a time when living standards have been falling in real terms, the Living Wage represents a baseline below which workers are unable to reach a minimum acceptable standard of living. Our research bases this minimum not on arbitrary judgments by "experts" or political views about what someone "deserves", but on what members of the public agree that people need. Below this minimum, households are excluded from having and doing the everyday things that make you part of contemporary society."  

The London Living Wage rate is also announced today.  Mayor Boris Johnson will announce that the London rate will rise from £8.80 to £9.15.  In the capital the rate is set by the Greater London Authority and takes into account the unique circumstances of living in London.

Rhys Moore, Director, Living Wage Foundation said: “As the UK recovery continues, it’s time to reward the workforce, many of whom accepted pay freezes and reduced hours to keep business afloat and unemployment at bay during the recession.

“Earlier this year the Living Wage Commission reported that, for the first time, more than half the families living in poverty in the UK are also in work.

“Full time workers are being forced to claim in-work benefits to keep a roof over their head and feed the family. For many providing these basics for loved ones is proving a struggle as pay clings to the minimum wage but living costs rise.

“Those businesses who can should follow the example of responsible employers such as Nestle and Nationwide, as well as hundreds of smaller, independent businesses like CTS Cleaning and Hodgson Sayers Roofing, who pay the Living Wage.

“The Living Wage is an independent calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay.”

The Living Wage Foundation is an initiative of Citizens UK, national community organising charity, which brings together people from every part of society and enables them to work together for the common good.

CRSP's paper 'Uprating the Living Wage in 2014' is available here.