The London Living Wage, which currently stands at £10.55 per hour, which was designed to reflect the expensive costs that come with living and working in London. This wage was introduced to make sure that people living and working in London are compensated enough to cover all costs they may incur, as there’s a higher cost of living in London compared to other parts of the UK. As someone who lives and works in London, the London Living Wage has introduced a step forward for those living and working in London who face the rising costs of living in the capital. With transport prices increasing as well as housing becoming harder and more expensive to gain, there’s more chance that the London Living Wage will help people make ends meet rather than living in poverty.
The London Living Wage is currently the highest form of paid wage in the UK as the minimum wage for workers aged 25 and over stands at a mere £8.21. For workers unfortunate to be younger than the desired age mark then workers under 25 will earn £7.70 if they’re aged between 21 and 24. It gets even worse for workers who are aged 18 to 20 as they will get £6.15 and those under 18 will earn £4.35. These figures stated come from the National Minimum Wage section from the GOV.UK website. More information can be found by clicking here.
However, the problem with the London Living Wage is that companies aren’t legally forced to pay the London Living Wage to workers whereas they’re legally compelled to pay the National Minimum Wage. The Living Wage Foundation state that there’s currently 5,672 employers throughout the UK paying the Living Wage to workers, these companies including Ikea, Nestle and the People’s Health Trust. The Living Wage is available to workers across the UK, but is £9.00 as costs of living are deemed less expensive than London. Most companies are reluctant to pay the London Living Wage as this would mean that they’d be paying more for labour that they could simply get away with my paying the National Minimum Wage. The reason some companies offer The London Living wage is to firstly attract future employees by their high hourly rate and the second reason being is that a long term investment would result in happier staff which then in turn leads to positive experiences for customers. In layman’s term, it’s a win-win situation for both companies and employees.
With The London Living Wage so high, a beneficial wage that’s meant to help those working and living in London, it does have its downsides unfortunately. If someone working in London works 40 hours per week in line with the London Living Wage, they’re expected to earn £1,688 monthly which is pre-tax income. However, with tax and National Insurance contributions this leaves the employee with around £1,400 without the option of paying into a pension. If an employee received only The National Minimum Wage but worked the same amount of hours with the addition that they’re aged over 25 they would earn £1,313.60 which is pre-tax income. With tax and National Insurance contributions this leaves the employee with around £1200 without the option of paying into a pension. A mere £2.34 seems to make a lot of difference in this situation as it can result in the employee taking home an additional £200 per month after deductions. Once again in layman’s terms, the more you earn the more you will be subject to tax and financial deductions.
Luckily, for those who are aged 25 and under, The London Living Wage can lead to a substantial rise in payment and from there living conditions. If someone, who was aged 18 to 20 earned £10.55 compared to a mere £6.15 (in line with the National Minimum Wage) this would mean an improvable wage with an extra £4.40 per hour. If we used the same example with an employee working 40 hours a week, this would lead to an extra £704 per month if paid The London Living Wage. Overall, I think we can all agree that The London Living Wage is a step in the right direction for those who are living and working in London who find the prices and costs of living here unfavourable.
Tips and tricks for what to do in London as well as travelling around it.