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UK Living Wage Rate calculated by Loughborough University rises by 40p

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The UK Living Wage rate has risen to £8.25 per hour, an increase of 40p on the 2014 rate, it has been announced today (Monday 2 November).

The Centre for Research in Social Policy (CRSP) at Loughborough University calculates the Living Wage - outside of London - on an annual basis.

It does this by 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 announcement today by the Living Wage Foundation will see a pay rise for approximately 68,000 staff that are employees of the accredited businesses that commit to paying all their staff, including sub-contracted teams working on their premises, at least the Living Wage.

There are now more than 2,000 accredited Living Wage employers across the UK. This doubles the number of accredited businesses from November 2014.

Accredited Living Wage employers will pay their staff at least the new voluntary Living Wage rate of £8.25 per hour, rising from £7.85; significantly higher than the national minimum wage of £6.70 per hour, and the new minimum wage premium for over 25s of £7.20 per hour that will come into force across the UK in April 2016.

Donald Hirsch, Director of CRSP, said: “There is a growing consensus that low-paid workers need to earn enough to get by, and evidence that the National Minimum Wage has not achieved this. So it's great news that 2,000 employers are accepting a benchmark based on our research about what people need.

“As the government also seeks to improve wages through its ‘National Living Wage’, our findings will continue to provide valuable evidence about how far it does what it says on the tin and helps people live at an acceptable level.”

The London Living Wage rate will also be announced today by the Mayor of London Boris Johnson. It is expected to follow a similar upward trend to the national rate, and is already set above the anticipated 2020 target for the minimum wage premium for over 25s of £9 per hour. In the capital, the rate is set by the Greater London Authority and takes into account the unique circumstances of living in London.

Sarah Vero, director of the Living Wage Foundation, said: “Today we are celebrating those 2,000 responsible businesses that are voluntarily paying the Living Wage to their staff. These employers are not waiting for government to tell them what to do; their actions are helping to end the injustice that is in-work poverty in the UK now.

“The Living Wage campaign is growing at pace. Today more UK businesses are announcing their Living Wage accreditation including national retailer Richer Sounds, Lloyds Banking Group and Unilever. They join a growing list of organisations ranging from FTSE 100 companies to independent businesses, SMEs and third sector employers who all share our belief that work should be the surest way out of poverty. The Living Wage is good for people and for business.”