Hundreds of thousands of working Brits are being given up to £1,500 a year extra following a huge increase in pay for specific employees.
It will come as a huge relief to workers following recent years in which the cost of living crisis has eaten away at disposable incomes, with sacrifices made in households up and down the country to do simple acts like turn the heating on.
We're talking about the Real Living Wage, which has been increased by the body that sets the rate, campaign group the Living Wage Foundation.
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The Real Living Wage is earned by a variety of workers across numerous sectors, so it is worth checking if the increase applies to you.
Do I earn the Real Living Wage?
Right now, more than 15,000 businesses in the United Kingdom are signed up to the Real Living Wage.
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It is a voluntary scheme and is completely separate to the National Living Wage, with this being set by the UK Government and applying to all adults aged 23 or older.
The Real Living Wage applies to workers over the age of 18. It is voluntarily paid by businesses, with the wage said to more accurately reflect how much it costs to live in the UK.
"The real Living Wage is the only UK wage rate based on the cost of living. It is voluntarily paid by over 15,000 UK businesses who believe their staff deserve a wage which meets everyday needs - like the weekly shop, or a surprise trip to the dentist," the Living Wage Foundation says.
The best way to find out if you earn the Real Living Wage is to check your contract or ask human resources.
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High profile businesses that pay the Real Living Wage include Lush, IKEA, Everton FC, and Burberry.
What is the Real Living Wage being increased to?
In the UK, the living wage is currently £12 and £13.15 in London.
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The rate will rise by 60p to £12.60 an hour across the UK and by 70p to £13.85 in London for workers at more than 15,000 employers.
Annually, this amounts to a £1,170 pay increase for full-time workers.
The voluntary rate compares with the statutory minimum wage of £11.44 an hour for workers over 21 and £8.60 for 18 to 20-year-olds.
A full-time worker earning the new Real Living Wage will earn £2,262 a year more than a worker earning the current government minimum, according to the Living Wage Foundation.
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In real terms, those in London will earn up to £1,456 a year extra. Outside of London, it is up to £1,248. That is based on 40 hour working weeks.
In the past three years, record numbers of employers have signed up to pay the Real Living Wage, including to third-party contractors like cleaners and security guards, with one in nine employees now working for an accredited living wage employer.
'Growing at pace'
Announcing the increase, Katherine Chapman, director of the Living Wage Foundation, said: “Low-paid workers have been hardest hit by the cost-of-living crisis and are still struggling to stay afloat amidst persistently high prices.
“The Real Living Wage remains the only UK wage rate calculated based on actual living costs, and the new rates announced today will make a massive difference to almost half a million workers who will see their pay increase.
“It’s a challenging time for businesses too, which is why it is so encouraging to see the living wage movement continue to grow at pace."
Darren Taylor, the country people and culture manager at IKEA, offered his support for the increase saying that a 'business's success is purely driven by its people'.
"As a values-driven company we care about our co-workers and their wellbeing. That’s why we’re committed to pay our co-workers a Real Living Wage that creates a fairer, inclusive and healthier standard of living for the many," Taylor added.
When will I get the Real Living Wage pay increase?
Given the voluntary nature of the Real Living Wage scheme, there is no exact date.
But employers who are signed up have until the deadline of 1 May, 2025, to pay the increased rates. They are being encouraged to pay it as soon as possible.
Paddy Lillis, general secretary of the shop workers union Usdaw, said: “The new Real Living Wage rates, which are based on the cost of living, are welcome and clearly show that the Tories’ so-called National Living Wage is nothing of the sort.
“We call on employers to take notice of the new rates and negotiate increases in their base pay to reflect the cost of living.”
Topics: Business, Cost of Living, Money, UK News, Jobs
Tom Earnshaw