The Minimum Wage Vs the Real Living Wage
Do you know the difference between the UK wage rates?
The Minimum Wage and National Living Wage vs the Real Living Wage are two very different rates of pay. Some UK based businesses confuse them. So, what’s the difference between the two? In terms of value, there’s a vast difference. Here we explain in more detail to provide some clarity…
The National Minimum Wage
The National Minimum Wage (NMW) is the minimum pay per hour workers of school leaving age (16) are entitled to by law. Until recently, all ages were submitted to the NMW, but now, dependent on the age category the worker fits into, will depend on the variant of their hourly salary. The older the worker, the more they’re entitled to earn per hour.
The age categories are shown below, inclusive of 2017’s NMW hourly rates:
Apprentice; £3.50 per hour
Under 18; £4.05 per hour
18 to 20; £5.60 per hour
21 – 24; £7.05 per hour
The National Living Wage
In 2016, the government introduced a higher minimum wage rate for all staff over 25 years or over, to assist in bridging the gap between the Minimum Wage and the amount people need to live on, they named it the National Living Wage.
This new hourly rate set by the government for over 25s currently stands at £7.50 and on 1st April 2018, the rate per hour will increase to £7.83. The rate will continue to rise each year until 2020 when it achieves the government’s £9 per hour target.
The Real Living Wage
The Real Living Wage, described by the Living Wage Foundation, shouldn’t be confused with the government’s statutory Minimum Wage or National Living Wage. This rate is voluntary and requires paying a higher sum of money to employees.
The Real Living Wage is currently set to £8.75 across the UK, and £10.20 across the entirety of London (including all boroughs of Greater London). It is voluntarily paid by almost 4,000 UK businesses who believe that their staff deserve a fair day’s pay for a hard day’s work (and we’re one of them).
This increase is largely thanks to the research by the Living Wage Foundation who independently calculate the hourly salary workers should receive, based on the best available evidence about living standards within the UK.
So, What Does This Mean for UK Businesses?
So, what is an acceptable amount to pay your employees? Well, companies such as Aviva Plc, Barclays Bank PLC, British Gas, HSBC Bank Plc and other UK businesses leading the way on fair play, with a staggering one third of the UK’s top companies now being accredited ‘Living Wage Employers’.
Here at Astrum Commercial, we are an accredited ‘Living Wage Employer’, which means we are certified by the Living Wage Foundation. We pay our staff the Real Living Wage, the only UK rate based on living costs and what people need to live. This means our staff are happy, they feel valued, and they work hard to ensure each job is completed to the best of their ability.
For more information on our friendly personnel and the service we provide, get in touch today.