PF1
Pay Rise to Real Living Wage
Personal Finances
Pay Rise to Real Living Wage
What do we mean by “Pay Rise to Real Living Wage”?
The Real Living Wage (RLW) is a voluntary hourly pay rate, independently calculated each year by the Living Wage Foundation, based on the actual cost of living — covering essentials like food, rent, travel, and energy. It is distinct from the government’s statutory “National Living Wage” or ‘National Minimum Wage’, both enforceable at set ages. The National Living Wage is simply set as a percentage of median earnings, whilst the Minimum Wage is based on recommendations and negotiations with businesses and trade unions. Neither takes into account the real cost of living in the UK at the point of calculation. The Real Living Wage also offers a London based higher rate.
Income is directly linked to individual and household wellbeing through changes to our personal finances, one of the 10 dimensions of wellbeing defined by the ONS. A change in income above a subsistence minimum to a wage genuinely sufficient for a decent standard of living can translate into reduced financial stress, lower reliance on food banks, and improved employee wellbeing and security. This MeasureUp value supports users to account for the financial uplift, but users may also want to look at these consequent wellbeing changes in addition.
Key Value
A monetised economic value of ££2,418
A full time worker moving to the Living Wage Foundation’s real Living Wage from the UK Government living wage would earn over £2,418 a year more
Where does this headline value come from?
On October 22nd 2025, the Living Wage Foundation announced the real Living Wage rates would increase to £13.45 an hour in the UK and £14.80 in London.
- The government’s ‘National Living Wage’ is the legal minimum wage for over 21s, as of 1st April 2025 it is £12.21 an hour
- School leavers who are under 21 are entitled to the National Minimum Wage, which is £10 per hour across the UK as of 1st April 2025.
- Full time workers on the Living Wage Foundation’s real Living Wage would earn over £2,418 a year more than a worker on the government’s ‘National Living Wage’, or £1.24 per hour.
- Full time workers in London on the real Living Wage would earn over £5,050 a year more than a worker on the ‘National Living Wage, or £2.59 per hour.
They calculate the yearly value based on the assumption that full-time work is 37.5 hours per week. (Cominetti and Murphy, 2025).
So, the yearly value is calculated as £1.24×37.5×52 =£2,418 for UK and £2.59×37.5×52 =£5,050 for London.
Details of the methodology can be found on the report “Calculating the Real Living Wage for London and the rest of the UK: 2025.”
Local Needs Analysis Data Source
Before using this MeasureUp value, we encourage you to assess the local need in relation to the activity or outcome.
Here is the most useful initial data source for assessing local need in relation to this value.
For assessing local needs related to the value EC4 ‘Pay raise to real living wage’, you can examine employment statistics for your area.
The most relevant indicators are: Employment rate, Economic inactivity rate, Percentage of workless households. These are available from the Office for National Statistics (ONS) through the Local Statistics Explorer or standard ONS datasets. You can filter data by country, region, combined authority, or local authority, depending on the indicator.
Also, the English Indices of Deprivation (IoD25) measure relative levels of deprivation in 33,755 small areas or neighbourhoods, called Lower-layer Super Output Areas (LSOAs), in England.
How to measure Pay Rise to Real Living Wage
If you’re just starting out, start with Bronze first. The result of a Bronze measurement is just an estimate, but requires the least effort; whereas Silver and Gold give more accurate results but require more effort.
Each level has an effort to accuracy indicator, choose the one that’s right for you.
Bronze
Effort
Accuracy
Monetised value:
Monetised value: The organisation has committed to paying directly employed staff who are on the National Living Wage at or above the Real Living Wage (as set annually by the Living Wage Foundation), applying the £2,418 a year or £1.24 per hr worked per worker affected .
Example in use:
Assume that a Construction company committed to becoming a Real Living Wage accredited employer. As part of this commitment, the company uplifted the pay of 10 members of staff — including site operatives, administrative assistants, and cleaning staff — from the government’s National Living Wage (£12.21/hr) to the Real Living Wage (£13.45/hr).
| Per Employee | 10 Employees | |
| Previous annual salary (NLW) | £23,810 | £238,095 |
| New annual salary (RLW) | £26,228 | £262,275 |
| Annual pay uplift | £2,418 | £24,180 |
The combined pay raise of £24,180 per year across 10 staff represents a direct and meaningful improvement in the financial wellbeing of some of the company’s lowest-paid workers. For each individual, an extra £2,418 a year — roughly £46 a week — can cover essentials such as food, travel, or energy bills that would otherwise go unmet on the National Living Wage.
Silver
Effort
Accuracy
Monetised value:
At the Silver level, you could calculate the pay rise by location. In addition, if any workers are uplifted from the National Minimum Wage this could also be calculated more accurately.
| Wage | Who it applies to | Rate (from April 2025) |
| National Minimum Wage (NMW) | Workers under 21, apprentices | £10.00/hr (18–20), £7.55/hr (under 18/apprentice) |
| National Living Wage (NLW) | Workers aged 21 and over | £12.21/hr |
| Real Living Wage | Any worker whose employer opts in | £13.45/hr (UK), £14.80/hr (London) livingwage.org |
The yearly value is calculated based on the assumption that full-time work is 37.5 hours per week. (Cominetti and Murphy, 2025).
Pay rise for moving from National Living Wage to Real Living Wage: the yearly value is calculated as £1.24×37.5×52 =£2,418 for UK and £2.59×37.5×52 =£5,050 for London.
Pay rise for moving from National Minimum Wage to Real Living Wage for age 18-20: the yearly value is calculated as (£13.45-£10) x37.5×52= 6,727 for UK and (£14.80-£10) x37.5×52=£9,360 for London.
Pay rise for moving from National Minimum Wage to Real Living Wage for age under 18/apprentice: the yearly value is calculated as (£13.45-£7.55) x37.5×52= £11,505 for UK and (£14.80-£7.55) x37.5×52=£14,137 for London.
Example in use: Assume that a company committed to the Real Living Wage across all sites. Of their 50 eligible low-paid staff, 20 are based in London and 30 are based in the North West (Manchester and Preston). All staff were uplifted from the National Living Wage (£12.21/hr) and National Minimum Wage (£10/hr) to the appropriate Real Living Wage rate for their location.
| Location | Staff | Previous Pay Type | Uplift per Person | Total Uplift |
| London | 20 | National Living Wage | £5,050 | £101,000 |
| London | 5 | National Minimum Wage (Age 18-20) | £9,360 | £46,800 |
| Northwest (UK) | 30 | National Living Wage | £2,418 | £72,540 |
| Northwest (UK) | 5 | National Minimum Wage (Age 18-20) | £6,727 | £33,635 |
| Total | 60 | £253,975 |
It delivered a combined annual pay uplift of £253,975 across 60 of its lowest-paid workers. The impact varies meaningfully by location:
- London staff receive the largest individual gain — £5,050 or £9,360 more per year — reflecting the substantially higher cost of living in the capital, where rent, transport, and food costs far exceed the national average.
- Northwest staff each gain £2,418 or £6,727 per year, providing meaningful relief from in-work poverty in a region where wage growth has historically lagged living costs.
- It is important to record location and age data to be able to adjust the value at this level
Gold
Effort
Accuracy
Monetised value:
At Gold level you are looking to build on your silver estimations by engaging with the person or people affected. (for people related values).
In this case you may be looking to understand and evidence some of the outcomes for thsoe affected such as reduced financial stress, lower reliance on food banks, and improved employee wellbeing and security.
Support in developing your Gold survey approach is available through the Measure Up partners, so please do reach out to Impact, State of Life or PRD.
| Value Type: | Activity |
What's this?
This is the type of value: specific interventions that have a set value due to a mix of outcomes of varying amounts they may create. |
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| UN SDG Categories: |
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What's this?
The UN Sustainable Development Goals are global goals adopted in 2015 for all signed up nations to achieve for us to have a sustainable global future by 2030. There are 17 Goals that address the global challenges we face, including those related to poverty, inequality, climate change, environmental degradation, peace and justice. The Goals are all interconnected, and in order to leave no one behind, it is important that we achieve them all by 2030. |
| 2020 Social Value Models: |
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What's this?
PPN 06/20 Taking account of social value in the award of central government contracts introduced the Central Government Social Value Model in 2020 which all Central Government contracting authorities must use in their in scope procurements. It consists of 5 themes, 8 policy outcomes, and 24 Model Award Criteria which outline key priority areas to achieve more social value. |
| 2025 Social Value Models: |
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What's this?
PPN 06/20 was superseded by PPN 002 Taking account of social value in the award of contracts, published in February 2025 in line with the Royal assent of the Procurement Act 2023. This PPN outlined the requirement to use the new 2025 Central Government Social Value Model. The Model applies to all Central Government procurements commencing on or after 1 October 2025 under the Procurement Act 2023. Out of scope procurements can choose to apply the model but are not required to do so. The updated model is structured around 5 government missions and 8 outcomes, with 17 Model Award Criteria, and a mandatory minimum 10% weighting of the total evaluation score assigned to social value. |
Evidence
Measure Up focuses on empowering you to numerically measure the impact you’re having. We recommend that numeric reports are backed up with stories and other types of evidence to help illustrate, in human terms, the impact that’s being made on individuals.
We recommend seeing consent from one or more participants in your intervention to collect and tell their story. This should include a little background on the participant, a summing up of life before the intervention, the human impact of the intervention, and the longer term (if known) impact on the person’s life outside of, and after, the intervention.
Providing photographs, audio recordings, video interviews or even artefacts from the intervention (for example, writing, paintings, music, etc from creative interventions) can add more colour, and convey the emotional impact of interventions more directly.
In some cases it’s appropriate to anonymise or abbreviate the personal information of case study participants. No story should be published or shared without the recorded consent of the individual(s) it concerns. Individuals continue to own the rights to their stories and if they request you stop sharing the story or making it available online you should do so promptly and without need for justification.
Feedback
Measure Up is an open, collaborative and transparent. If you have any suggestions or feedback on our pragmatic, recommended approach to measuring Life Satisfaction please get in touch so we can share and discuss this at our next Advisory Group meeting.
More help
We want to empower anyone to perform and improve their impact measurement – without needing a degree in economics.
If you need any more help, or just someone to do the legwork for you we can help signpost you to software, training and consultancy to help you get to grips with the impact you’re having.
