The voluntary Living Wage has risen to £14.10 an hour

Reacting to: How much is the minimum wage? (BBC News) →

Two different pay rates get reported under one confusing label every autumn, and this week it's the voluntary one that moved. The Living Wage Foundation announced on 15 October 2026 that its real Living Wage rises to £14.10 an hour across the UK and £15.45 an hour in London, a 65p increase that lifts a full-time worker's pay by over £1,250 this year. Nearly 17,000 accredited employers now pay it, covering close to half a million workers, and the announcement marks the campaign's 25th anniversary — nearly £5bn in extra wages secured for low-paid staff since it began, including almost £700m in the last year alone.

If you employ anyone, this is worth five minutes even if you have no intention of signing up, because the two figures sitting next to each other this week — the legal minimum you must pay and the voluntary rate thousands of employers choose to pay — are easy to blur together and expensive to get wrong either way.

Two wage figures, two very different obligations

The National Living Wage is the government's statutory floor for workers aged 21 and over. From 1 April 2026 it is £12.71 an hour, up 50p on the year, which works out at £24,784.50 for someone working 37.5 hours a week — an increase of £900 over the year before. Workers aged 18 to 20 are on the National Minimum Wage, which rose 85p to £10.85 an hour, worth an extra £1,500 a year for a full-time worker. Workers aged 16 and 17, and most apprentices, are on £8 an hour. Every employer is legally required to pay at least these rates for the relevant age band, with no exceptions for a genuine mistake, a tronc scheme, a uniform deduction or an unpaid trial shift that tips someone below the floor.

The real Living Wage sits well above all of that and always has. At £14.10 an hour it is £1.39 above the National Living Wage for a worker aged 21 or over, and it is set independently by the Living Wage Foundation, a charity, calculated from the actual cost of food, rent and bills rather than from what the economy can bear. Paying it is entirely optional. Accredited Living Wage Employers now include household names like IKEA, Aviva and Lush, half of the FTSE 100, and thousands of small businesses too — Mother Ivey's Bay Holiday Park, Bird & Blend Tea and Just Helpers Cleaning Agency are the examples the Foundation names this week. Charlie Walker, managing director of the cleaning firm Clean for Good, put the business case plainly in the Foundation's announcement: paying a wage staff can live on is "central to our growth as a business," helping the firm "attract and retain talented, hard-working staff" in an industry with notoriously high turnover.

Worked numbers: what moving up actually costs

Take an illustrative example. Say you run a hair salon with five staff, each working 30 hours a week, 52 weeks a year — 1,560 hours each. Paying all five at the National Living Wage of £12.71 an hour costs £19,827.60 per employee, or £99,138 a year in total wages for the team. Paying the same five people the real Living Wage of £14.10 an hour instead costs £21,996 per employee, £109,980 for the team — a jump of £10,842 a year, or just under 11% on your total wage bill for those five roles. That is before employer National Insurance and any pension contributions, which rise in line with the higher pay, so the true cost to the business sits above £10,842, not below it.

That is a real number to plan around before applying for accreditation, not an abstract one. It is also, per the Foundation's own research, the number that sits against 4.4 million UK workers still paid below the real Living Wage, 61% of whom say they have cut back on food or heating, fallen behind on bills, or taken out a payday loan in the past year. The business case and the cost genuinely both exist here — neither cancels the other out, and the right call depends on your margins, your sector and how much staff turnover is already costing you.

What it means for you, by situation

If you employ staff at or near the statutory floor and have never looked at Living Wage accreditation, treat this as a number to model against your own headcount, not the illustrative one above. Retail, hospitality, cleaning and care are the sectors the Foundation cites most often for both low pay and high turnover, so if you are in one of those and losing staff regularly, the worked numbers above are the real comparison to run before dismissing accreditation as unaffordable. Our payroll service can build that model against your actual team rather than a five-person example.

If you are confident you are already paying correctly at the statutory floor, the thing worth checking this week is not the rate itself but every exception that can quietly drag someone below it — unpaid time spent changing into uniform, a trial shift treated as unpaid, or a salary-sacrifice deduction that pushes an hourly rate under the line once you do the maths properly. Those are exactly the kind of errors that caught out the employers named below.

If you employ under-21s or apprentices, remember the lower statutory bands apply to them specifically, though the government has already said its long-term goal is to scrap the separate 18-to-20 rate entirely and move everyone onto one adult rate — a stated direction, not a date on a calendar yet.

What's still open

The real Living Wage is reviewed and reset every year, so signing up commits a business to an annual review, not a fixed number forever — this year's £14.10 will move again next October. The government's ambition to merge the 18-to-20 rate into the adult rate has no confirmed timetable. And with 4.4 million workers nationally still below the voluntary rate, most employers are not expected to move immediately; there is no compliance deadline attached to it, unlike the statutory rates above it.

Two things to do this week

First, if you have any doubt about whether every member of staff clears the correct statutory rate for their age band, run your numbers through the free government checker at gov.uk/am-i-getting-minimum-wage. In March 2026 the government named 389 employers fined a combined £12.6m for underpayment, including Busy Bees, Norwich City Football Club, Hays Travel and Costa Coffee, who between them had to repay £7.3m to around 60,000 workers — it catches big, careful organisations as easily as small ones. Second, if accreditation is genuinely on the table for recruitment or retention reasons, get the real cost modelled against your actual team before you commit to the Foundation's application process at livingwage.org.uk, rather than budgeting from a headline percentage.

Getting payroll numbers like these modelled properly, both the statutory check and the "what would this actually cost us" question, is exactly what our Payroll & pensions service is built to do. If you want your own team's numbers run rather than an illustrative one, talk to us.