Living wage increases by 20p an hour

Office workers - PA

The hourly rate which campaigners say people need to earn to meet minimum living standards has risen by 20 pence, the Living Wage foundation has announced.

The new rate of £8.45, calculated by the Centre for Research on Social Policy, based on their Minimum Income Standard, reflects rising costs of essentials, and is over a pound higher per hour than the UK Government ‘National Living Wage’ which replaced the minimum wage for over 25s only.

Around 3,000 businesses in the UK have pledged to pay the higher rate, including 630 in Scotland, many of whom who have also signed up to the Scottish Government’s business pledge.

"Today's new living wage rates bring a welcome pay rise to thousands of workers across the UK," said Katherine Chapman, director of the Living Wage Foundation.

"One in five people earn less than the wage they need to get by. That's why it's more important than ever for leading employers to join the growing movement of businesses and organisations that are going further than the government minimum and making sure their employees earn enough to cover the cost of living."

First Minister Nicola Sturgeon welcomed the rise and urged more employers to become accredited Living Wage employers with Scottish Living Wage Accreditation Initiative, based within the Poverty Alliance.

“For business, paying the Living Wage makes sense - it’s an investment in people and all the evidence shows it leads to increased productivity and reduced staff absence and turnover, while sending a strong signal to customers about fairness,” she said.

“Yet we also know around 20 per cent of Scotland’s workforce earn less than the Living Wage. With low pay one of the main drivers of in-work poverty, it’s vital that employers who can pay the real Living Wage do so.”

However Peter Kelly, director of the Poverty Alliance, said the amount of people earning less than the Living Wage had gone up in Scotland.

“430,000 people in Scotland still earn less than the wage they need to get by. This is an increase on the number of people struggling since last year’s figures,” he said.