The number of UK employers voluntarily paying the higher Living Wage has risen by 19% over the past year, despite signs of a cooling labour market and pressure from statutory wage increases.
Figures from the Living Wage Foundation show that 16,040 employers are now accredited as paying the voluntary Living Wage — a rate set higher than the government’s statutory minimum. That’s up from just over 13,400 a year ago, with private sector companies, public bodies and charities all committing to higher wages for their lowest-paid staff.
The voluntary rates currently stand at £12.60 an hour across the UK and £13.85 in London, significantly above the £12.21 statutory minimum wage introduced in April for workers aged 21 and over. In the capital, this means Living Wage employers pay 13% more than the legal minimum, and 3.2% more across the rest of the UK.
The wage rates are set annually by the Resolution Foundation and overseen by the Living Wage Foundation, based on the real cost of living rather than government policy.
Among the businesses paying the Living Wage are major brands such as Ikea, Fred Perry, and Aviva. A study conducted by Cardiff Business School for the Living Wage Foundation found that employers adopting the scheme often reported “modest but positive” benefits, including improvements in reputation, staff retention, and people management.
Katherine Chapman, Director of the Living Wage Foundation, said the figures were encouraging: “Despite uncertain economic times, the Living Wage movement continues to grow across a range of sectors. It shows what’s possible when civil society and business come together to drive up standards and create work that works for everyone.”
Of the 2,830 organisations that signed up in the year to May, 1,751 were from the private sector, indicating sustained appetite for fair pay despite economic pressures.
The increase comes at a time when wider labour market indicators show signs of softening. According to the Office for National Statistics (ONS), wage growth slowed to 5.6% in the three months to March, down from 5.9% in the previous quarter. Meanwhile, unemployment rose to 4.5%, and the number of payrolled employees fell by 106,000 over the past year to 30.3 million. Job vacancies dropped by 42,000 to 761,000 — well below their pandemic-era peak of 1.3 million in early 2022.
The statutory minimum wage saw a 6.7% rise in April, part of a series of above-inflation increases, prompting concern among some businesses about affordability. However, the continued growth in voluntary Living Wage adoption suggests that many employers remain committed to offering more than the legal minimum.
With inflation falling and attention turning to real-terms income growth and workplace quality, the voluntary Living Wage is increasingly seen as a tool for employers to differentiate themselves — especially in sectors grappling with recruitment and retention challenges.
