A Quick Overview
From April 2025, the Real Living Wage will rise to £13.45 per hour across the UK and £14.80 in London. This represents an increase of £0.85/hour (6.7%) across the UK and £0.95/hour (6.9%) in London. Unlike the government’s National Living Wage (which will be £12.21/hour for workers aged 21+), the RLW is a voluntary rate based on what people actually need to live comfortably.
For thousands of accredited employers, this increase means reviewing payrolls, budgets, and long-term pay strategies – but it also signals a continued shift towards valuing people as a key part of business success. There are now over 16,000 accredited RLW employers, and nearly half a million workers are set to benefit immediately.
Why the Increase Matters
This year’s uplift reflects the rising cost of everyday life – from food and housing to energy bills and transport. Paying the Real Living Wage shows your people that you understand these pressures and that you’re committed to supporting their wellbeing.
To put it in perspective, the increase equates to around £2,418 more per year for a full-time worker on the UK rate and £5,050 more per year in London. Paying fairly isn’t just a financial commitment; it’s an investment in engagement, retention, and employer brand.
For many businesses, especially in competitive sectors, being an RLW employer isn’t just about doing the right thing – it’s also about standing out. Fair pay can boost engagement, improve retention, and strengthen your employer brand.
The Impact on Smaller Businesses
We know that for small and growing businesses, a 7% increase in wage costs can feel daunting. Margins are tight, and every pound counts. However, many SMEs that already pay the Real Living Wage report that it reduces turnover, attracts skilled workers, and builds stronger, more motivated teams.
If you’re not yet paying the new rates, you have until May 2026 to make the change. That gives time to plan, review budgets, and communicate openly with your team about what’s coming next.
Steps You Can Take Now
Review your pay structure – Identify who will be affected and what the overall cost impact looks like.
Plan ahead – Build the change into your financial forecasts and explore any productivity gains that could help offset costs.
Communicate early – Be transparent with your team. Even if you can’t make the full jump straight away, honesty builds trust.
Think long-term – Paying fairly is an investment in your people and your brand. Over time, it can reduce recruitment costs and improve team loyalty.
Looking Ahead
The Real Living Wage increase is another reminder that people are the heart of every business. Whether you’re a large employer or a small local business, showing your commitment to fair pay is a powerful way to strengthen your culture and your reputation.
It’s not just about meeting a benchmark – it’s about building a workplace where people feel valued, supported, and proud to be part of your journey. Remember, there are still ~3 million jobs in the UK paying less than the RLW, so your decision to pay fairly could set your business apart.
Let’s Make It Happen Together
At My HR Hub, we help businesses of all sizes navigate pay changes, employee engagement, and HR strategy with confidence. If you’d like support reviewing your pay structures or communicating these changes to your team, our friendly experts are here to help. Get in touch with us today to explore how we can make the Real Living Wage work for your business and your people.
