How the cost of living crisis has highlighted the need for employers to pay the Real Living Wage

Did you know that the real Living Wage is based on the cost of living and is voluntarily paid by nearly 9,000 UK employers? 

We are pleased to announce that Breakroom has been accredited a Real Living Wage accreditation. As exciting as that is, it’s highlighted why we believe in this campaign and why it’s one of our Breakroom basics when it comes to a 'good' job. 

What is it, and how does it affect you as a business? 

The Real Living Wage is based on what people need for a decent standard of living, not just the bare minimum.

For example, things like healthy food, a warm home and a birthday treat for your kids. Shockingly the minimum wage is just that… the minimum. 

Inspired by the Real Living Wage, in 2016 the government did increase the minimum wage for those over 25 (which is now over 23 years old) and called it the ‘National Living Wage.’ However, this is still not an accurate amount for what people actually need to live on. 

These are the current rates as of April 1st 2022: 

The National Minimum Wage 2022

The National Minimum Wage

(The government minimum)

How much is it?

Ages 21- 22: £9.18

Ages 18-20: £6.83

Ages 16-17: £4.81

Is it the Law?


How is it set?

Recommendations from businesses and trade unions 

Is there a London weighting?


National Living wage 2022

National Living wage

Government minimum for over 23’s

How much is it?


Is it the Law?


How is it set?

% of medium earnings, aiming to reach 66% of median earnings by 2024 

Is there a London Weighting?


The Real Living Wage from September 2022

The Real Living Wage

The wage is based on what people need to live 

How much is it?

£10.90 across the UK 

£11.95 in London

Is it the Law?


Age Range

18 and older 

How is it set?

The real cost of living is based on household goods and services 

Is there a London Weighting?


The Real Living Wage is a more accurate calculation of what people really need to get by. Whilst it’s not a legal requirement to pay it, the benefits of doing so far outweigh not doing so. 

In this article, we are going to explain why and how you should do this.  

We are in the middle of a cost of living crisis 

It’s been no secret that we’re living in the middle of a cost of living crisis.

Here are some of the things that have contributed to this: 

  • Higher demand for oil and gas has pushed energy prices up

  • The government support that was offered during the pandemic has ended, for example, reduced VAT rates for hospitality

  • There is a shortage of staff in industries such as hospitality and transport. This has been caused in part by Brexit (many foreign workers left the country) and partly by the pandemic

  • Shortages of goods and services from supply chain disruptions around the globe

Where are people seeing the Cost of Living prices increasing? 

Energy bills are soaring 

The worldwide demand for oil and gas has forced energy prices up. Petrol prices are at an all-time high. with the energy cap lifted by energy companies, prices are expected to rise by up to 54% or more. 

Rent, bills and mortgage prices are increasing 

With average rents increasing by an average of 8.6% even the cost of people’s housing is going up. In April 2022 Council Tax is due to increase for two-thirds of English councils. Those with mortgages will also feel the pinch as costs increase due to the Bank of England increasing its base interest rates, making mortgage repayments more expensive. 

Other bills due to go up are phone bills and internet providers. For example, BT have said they are increasing their prices by £42 a year. 

Groceries shopping set to rise even higher   

Food costs have been slowly rising for some time now. In April, with inflation rising and the conflict in Ukraine disrupting supply chains, they are due to increase even further. The strain is already being felt with Food Banks reporting more demand now than ever before. 

Tax increases 

From April National Insurance tax is due to increase by 1.25% This is a bid to try and get the backlogs in the NHS and social care funding back under control. 

Commuting is going to be costly  

Travelling to work will also cost more. Since March, rail prices have increased by 3.8%. 

This has all contributed to the 6.2% price rise in the past year, which is the largest increase in 30 years. 

Why is this important to you as an employer?

According to our data of over 225,000 frontline workers in retail, care, logistics and hospitality, we found that 47% of shift and hourly workers are earning less than the Real Living Wage. 

With the Cost of Living is dramatically on the rise, and so many people are being paid less than what they need to get by. It's now more important than ever for you as an employer to step up and commit to the Real Living Wage. 

The Real Living Wage actually benefits your business 

Stats provided by the Real Living Wage show how being Living Wage accredited can benefit your business: 

  • 93% of businesses have benefited from their accreditation 

  • 86% have said that it’s improved their businesses reputation 

  • 75% have said that it increased motivation and retention rates for employees 

  • 64% have said it helped differentiate themselves from others in the industry 

  • 58% have said it improved relations between the managers and their staff 

How to apply for the Real Living Wage 

When applying for the Real Living Wage you need to commit to the following: 

  • Pay the Real Living Wage to all of your directly employed employees

  • Have a plan to pay your contractors a real living wage 

Then simply fill out this form on the Real Living Wage here.

Once you decide to do it and you have figured out your budget, it’s that simple to sign up. 

Why becoming Real Living Wage accredited is the future of work

We know it’s not easy to make the transition to committing to being a Real Living Wage employer. And of course, you may really notice the difference and have to evaluate your budget in order to do so. But, we hope you can see the benefits and necessities of doing so in order to keep up with the modern workplace.

This is just one way to step into the future of work. There are also so many things that you can be doing to ensure that you are a good employer.

Get in touch with us to manage your employer profile on our site today.

Published on 5 April 2022