This term is very confusing. The government sets the National Minimum wage (NMW) and the National Living Wage (NLW). The Real Living wage is a separate voluntary standard.

Becoming a real living wage employer can help attract staff, especially when operating in a low paying sector where wages are not typically that high. The real living wage is a voluntary initiative that employers can choose to join, which seeks to persuade employers that paying people more than the minimum wage is good for business.

The real living wage tries to reflect the actual cost of living.

This is in contrast to the National Minimum Wage and National living Wage, which are the legal minimum pay employers must give.

The current hourly rates are £13.15 in London and £12 for the rest of the UK. The current rate of National Living Wage for over 21s is 11.44 per hour.

Adopting the Real Living Wage will need to be factored into your  calculations for your hourly rates, and you will have to consider if this will affect your competitiveness.

Another consideration is that once a change to the real living wage has been implemented, it will not be straightforward to revert to NMW and NLW.

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