Education

London’s lowest-paid workers see a modest wage increase amid affordability concerns

Thursday, 23 October 2025 4:08AM UTC

The London Living Wage rises to £14.80, offering a boost to low-paid workers, but experts warn it may still fall short of London's high living costs, highlighting ongoing financial challenges for households across the capital.

Some of London's lowest-paid workers saw their hourly wage increase by six-point-nine percent, as the London Living Wage was raised to £14.80. This voluntary wage rate, which businesses can choose to adopt, represents a pay rise intended to offer employees a better standard of living in a city notoriously marked by high living costs.

For a full-time worker putting in 37.5 hours a week, earning £14.80 per hour translates to an annual salary of about £28,860, which is approximately £5,000 more than the National Living Wage of £12.21 per hour set for those over 21 years old. The Living Wage Foundation calculates this rate based purely on the cost of living, ensuring it reflects what workers need to cover essentials such as rent, bills, and food. The new rates were announced to take effect by 1 May 2026, allowing employers a six-month period to adjust, and are expected to support over 150,000 low-paid workers across the capital. Around 4,000 London employers, including half of the FTSE 100 companies, have already committed to paying this wage, highlighting the growing movement towards fairer pay in the city.

However, experts and advocates remain divided on whether this rate is truly sufficient to live comfortably in London. Manny Hothi, Chief Executive of Trust for London, described the increase as a "fantastic" boost for low-income workers. He acknowledged the reality that 50-60 percent of income for these workers typically goes on rent, with rising costs for bills and food tightening household budgets. He noted practical improvements such as families being able to buy new school uniforms and have more involvement in their children's lives, but admitted that the wages provide more of a baseline than full financial freedom.

Financial experts from Unbiased suggest that a healthy budget for a comfortable living involves allocating 50 percent of income to necessities, 30 percent to living costs, and 20 percent to savings. Applying this framework to the new London Living Wage salary leaves approximately £1,012 for essentials like rent and bills, though the average cost of renting a single room in London currently sits at around £995 per month. After accounting for tax and national insurance, this scenario leaves very little for other living costs, indicating that many on the London Living Wage may need to dip into their recreational or savings budgets to cover essentials.

Such a financial tightrope can be especially challenging for parents or those supporting families, for whom £14.80 per hour may not stretch far enough to cover additional expenses.

Katherine Chapman, Executive Director of the Living Wage Foundation, emphasised the importance of the real Living Wage as the only UK wage rate independently calculated based on actual costs, stating that the rates "will make a massive difference to workers and their families," helping them gain stability amid the pressures of rent, bills, and other essentials. She also highlighted that despite ongoing economic challenges, the movement continues to grow with over 16,000 accredited employers committed to paying these rates and demonstrating the positive effects on staff and business alike.

Mayor Sadiq Khan has similarly acknowledged the significance of the pay rise for London’s workforce, stressing its role in improving financial stability for many low-paid workers in the city.

Overall, while the increase to £14.80 per hour marks important progress in addressing in-work poverty in London, it remains a baseline figure that, according to financial experts and advocates, may not fully meet the realities of living costs in the capital, particularly for households with additional responsibilities.

📌 Reference Map:

Paragraph 1 – ^[1] (MyLondon)
Paragraph 2 – ^[1] (MyLondon), ^[2] (Living Wage Foundation), ^[3] (Evening Standard)
Paragraph 3 – ^[1] (MyLondon), ^[4] (Independent)
Paragraph 4 – ^[1] (MyLondon)
Paragraph 5 – ^[1] (MyLondon), ^[4] (Independent)
Paragraph 6 – ^[1] (MyLondon), ^[2] (Living Wage Foundation)
Paragraph 7 – ^[3] (Evening Standard), ^[1] (MyLondon)
Paragraph 8 – ^[1] (MyLondon), ^[3] (Evening Standard), ^[2] (Living Wage Foundation)

Source: Noah Wire Services

More on this

https://www.mylondon.news/news/cost-of-living/experts-verdict-new-london-living-32729516 - Please view link - unable to able to access data
https://www.livingwage.org.uk/news/real-living-wage-rates-increase-%C2%A31345-uk-and-%C2%A31480-london - The Living Wage Foundation has announced a 6.9% increase in the London Living Wage, raising it to £14.80 per hour. This adjustment aims to support over 150,000 low-paid workers in London, ensuring their wages better reflect the rising cost of living. The new rate is set to be implemented by 1 May 2026, providing employers a six-month period to adjust. The increase underscores the Foundation's commitment to addressing in-work poverty and promoting fair pay across the capital.
https://www.standard.co.uk/news/london/london-living-wage-low-paid-londoners-ps14-80-hour-sadiq-khan-b1254226.html - The London Living Wage has been increased by 6.9% to £14.80 per hour, benefiting over 150,000 low-paid workers in the capital. This voluntary rate, adopted by approximately 4,000 firms, including half of the FTSE 100 companies, aims to help workers cope with the high cost of living in London. Mayor Sadiq Khan highlighted the significance of this rise in improving the financial stability of London's workforce.
https://www.independent.co.uk/news/uk/home-news/real-living-wage-pay-rise-minimum-wage-2025-b2849814.html - Nearly half a million workers are set to receive a pay boost as the real Living Wage increases to £13.45 per hour across the UK and £14.80 per hour in London. This 6.7% rise aims to help workers better cope with rising living costs. The Living Wage Foundation, which calculates the rate based on the cost of essentials, states that a full-time worker on the real Living Wage will earn £2,418 more annually than someone on the government's minimum wage, and £5,050 more in London.
https://www.standard.co.uk/news/london/london-living-wage-increase-costs-employers-salaries-rise-pay-b1189438.html - The London Living Wage has risen to £13.85 per hour, marking a 5.3% increase and benefiting over 140,000 workers. This voluntary rate, set by the Living Wage Foundation, is paid by approximately 4,000 London employers. The rise reflects the higher cost of living in the capital and aims to support workers facing financial challenges amid persistently high prices.
https://www.livingwage.org.uk/news/real-living-wage-increases-%C2%A31260-uk-and-%C2%A31385-london - The real Living Wage has increased to £12.60 per hour across the UK and £13.85 per hour in London, benefiting nearly half a million workers. This 5% rise aims to help workers cope with the impact of years of high prices. The Living Wage Foundation calculates the rate based on the actual cost of living, differing from the government's National Living Wage, which is the legal minimum employers must pay for over-21s.
https://www.livingwage.org.uk/calculating-real-living-wage-london-and-rest-uk-2025 - This report outlines how the 2025-26 real Living Wage rates in the UK and London are calculated by the Resolution Foundation, overseen by the Living Wage Commission on behalf of the Living Wage Foundation. The UK Living Wage rate for 2025-2026 is £13.45, and the London Living Wage rate is £14.80. The report provides detailed information on the methodology used to determine these rates.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The London Living Wage increase to £14.80 was announced on 22 October 2025 by the Living Wage Foundation ([livingwage.org.uk](https://www.livingwage.org.uk/news/real-living-wage-rates-increase-%C2%A31345-uk-and-%C2%A31480-london?utm_source=openai)). The report was published on 23 October 2025, indicating timely reporting. However, the narrative includes detailed financial analyses and quotes from experts, suggesting it may be based on a press release. This typically warrants a high freshness score but should be flagged for potential reliance on a single source. ([livingwage.org.uk](https://www.livingwage.org.uk/news/real-living-wage-rates-increase-%C2%A31345-uk-and-%C2%A31480-london?utm_source=openai))

Quotes check

Score: 7

Notes: The quotes from Manny Hothi, Chief Executive of Trust for London, and Katherine Chapman, Executive Director of the Living Wage Foundation, are consistent with their public statements in the Living Wage Foundation's announcement ([livingwage.org.uk](https://www.livingwage.org.uk/news/real-living-wage-rates-increase-%C2%A31345-uk-and-%C2%A31480-london?utm_source=openai)). However, the exact wording in the report varies slightly from the press release, indicating potential paraphrasing or additional commentary. This suggests the content may be original or exclusive, but the variations in wording warrant further scrutiny.

Source reliability

Score: 9

Notes: The narrative originates from MyLondon, a local news outlet. While it is not as widely recognised as national media, it is a legitimate source. The Living Wage Foundation, a reputable organisation, is cited as the primary source of information. The presence of direct quotes from experts adds credibility, though the reliance on a single source for detailed financial analyses should be noted.

Plausability check

Score: 8

Notes: The claims about the London Living Wage increase to £14.80 and its expected impact on over 150,000 low-paid workers are consistent with the Living Wage Foundation's announcement ([livingwage.org.uk](https://www.livingwage.org.uk/news/real-living-wage-rates-increase-%C2%A31345-uk-and-%C2%A31480-london?utm_source=openai)). The financial analyses provided align with the reported figures. However, the narrative's detailed breakdowns and expert opinions suggest it may be based on a press release, which warrants a higher scrutiny score.

Overall assessment

Verdict (FAIL, OPEN, PASS): OPEN

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary: The report provides timely and consistent information regarding the London Living Wage increase, with direct quotes from reputable sources. However, the detailed financial analyses and the slight variations in quoted wording suggest potential reliance on a press release, which may affect the originality of the content. The reliance on a single source for detailed analyses also raises questions about the comprehensiveness of the reporting. Further verification from additional independent sources is recommended to confirm the accuracy and originality of the content.

London
Living Wage
Cost of Living