London Living Wage goes up to £7.05

The new £7.05 an hour Living Wage reflects the fact that annual inflation has hit poorer people much harder due to significant rises in utility costs such as gas and electricity.

The Living Wage for London was first calculated at £6.70 in April 2005 and the new figure was unveiled in the second annual report of the Mayor’s Living Wage Unit which finds that any wage below around £6.15 an hour results in an income at or below the poverty line level in London - even when benefits are taken into account. The hourly income necessary to receive an above poverty wage in London is therefore significantly above the national minimum wage of £5.05 an hour. This difference is largely accounted for by the higher cost of housing in London.

Around one in seven of London employees receive less than £6.15 per hour and effectively living on poverty level wages.  But a Living Wage must include a secure margin to ensure that London employees do not fall into poverty as a result of unexpected expenses. To achieve this a figure of 15 per cent has been added to the poverty level wage.