Mayor reveals new London Living Wage

05 November 2012

To mark the start of Living Wage Week and in line with his vision to boost jobs and growth in the capital, the Mayor of London today announced a new rate for the London Living Wage.


Boris Johnson revealed that the London Living Wage will rise from £8.30 to £8.55 per hour as part of a continued campaign to ensure that workers on lower incomes are fairly rewarded for their vital role in driving the capital’s economic success.


Since it was introduced in 2005 an estimated 11,500 workers have benefitted from the rate, which is calculated by the Greater London Authority. Over a full year this year’s rise will put around £4.5 million into the pockets of lower paid Londoners.


A newly designed trade mark that formally recognises and accredits employers who pay the London Living Wage will be made available by the Living Wage Foundation for organisations to display as a clear sign of their commitment to supporting and investing in their staff. Recent research from Queen Mary University showed that introducing the London Living Wage improves staff retention rates for firms and more than half of employees feel happier about their place of work. The scheme also has clear benefits for the Treasury because of an increased tax base and the Mayor today urged more employers to sign up.


The Mayor of London, Boris Johnson, said: “By building motivated, dedicated work forces the Living Wage helps businesses to boost the bottom line and ensures that hard working people who contribute to London’s success can enjoy a decent standard of living. Despite very challenging economic times it’s clear that more employers are waking up to the huge benefits that paying the Living Wage delivers. We have a great range of household names on board and I want to see more coming forward. I’m sure that the new Living Wage Foundation trademark will become a fantastic badge of honour for the capital’s employers and add further momentum to a campaign I wholeheartedly support."


Launched by the campaign group London Citizens, the Living Wage Foundation was formed in May 2011 with the support of six principal partner organisations including KPMG, Save the Children, Linklaters, Resolution Foundation, Queen Mary University and Trust for London.


Rhys Moore, Director of the Living Wage Foundation, said: “The Living Wage movement is growing as more employers realise the benefits of paying workers enough to get by on. Like Fairtrade, it represents a new standard for responsible business. We hope to see the Living Wage mark and symbol spreading further and further across organisations in the UK.”


Marianne Fallon, Head of Corporate Affairs at KPMG, said: "There is a compelling business case as well as a moral one for paying the living wage. It is not only about doing the 'right thing'. The benefits of higher motivation, greater loyalty and lower churn amongst staff in receipt of a living wage can actually lead to cost neutrality or even savings for businesses. We would urge more big employers to consider paying their staff a wage which means they can afford a socially acceptable quality of life. We believe it is the responsible thing to do."


From banks and insurance companies, to charities and leading universities, there are now close to 200 employers in London who are supporting the campaign to pay the Living Wage.


More than 80 have been formally accredited by the Living Wage Foundation, with a further 47 awaiting accreditation including the Greater London Authority, whose contracts see around 3,400 people benefitting. A further 73 employers, from across the public and private sectors, have said they are committed to paying the London Living Wage.


The rate and benefits of paying it are outlined in a report by GLA Economics, which acknowledges there is still some way to go before all Londoners receive the Living Wage. Ten per cent of full-time workers and 44 per cent of part-time workers earn less than the London Living Wage – almost 700,000 people.


A new higher rate was also announced for the national Living Wage, which has increased from £7.20 to £7.45. This compares to the national minimum wage rate of £6.19 an hour.


New figures released today show that the Living Wage campaign has lifted 45,000 people out of working poverty and won over £200m of improved pay for low-income workers across the UK.


Neil Jameson, Executive Director London Citizens said: "People tell us that there is a cost to the Living Wage! Of course there is a cost. The issue is should this cost be carried by the children, parents and families of low waged workers across London or should it be shared with the growing number of good employers who have signed up to the Living Wage. Paying workers the Living Wage allows them to spend more time with their children, volunteer for their community and contribute to the common good."

Notes to editors


For more information on the Living Wage Campaign please visit


To read the report ‘A Fairer London: The 2012 Living Wage in London’, please visit


The London Living Wage rate is calculated by GLA Economics with cross-party support. It is updated on a yearly basis, calculating a ‘poverty threshold wage’ and adding a 15 per cent margin to ensure that the recipients do not fall to the level of poverty wages


The UK Living Wage rate (outside London) is calculated annually by the Centre for Research in Social Policy at Loughborough University, with funding from the Joseph Rowntree Foundation.


An estimated total of 45,000 workers have benefitted from the campaign to a total of £210m. This has been estimated by Professor Jane Wills of Queen Mary University of London.


Accredited Living Wage employers – there are now close to 100 accredited Living Wage Employers. A full list is below.


Living Wage Week will see events taking place across the UK – in York with Archbishop John Sentamu, in Wales with Cardiff Council, in London with Ed Miliband and Rachel Reeves.