Emma Kosmin, programme manager for the Living Wage Foundation, reflects on the rate being increased to £8.75 an hour

This week has seen the announcement of the updated real living wage, calculated according to the cost of living.

The living wage increase will mean a pay rise for hundreds of thousands of people. There are now 3,600 accredited living wage employers that have increased well over 150,000 people’s pay to the living wage rate.

Living wage employers ensure that all staff, regardless of whether they are direct employees or third-party contracted staff, receive the real living wage, which is significantly higher than the statutory minimum for over 25s (£7.50 per hour introduced in April 2017). This means that those earning less than the real living wage could be earning at least £1,852.50 less per year than those on a living wage.

Across the UK there are still five and a half million people – or 21% of employees – earning below the living wage. In the charity sector that rises to 26% (and 29% in Scotland), meaning that one in four charity employees can’t meet the cost of living.

A pay rise to the wage makes a huge difference and has business benefits including increased morale, productivity, staff retention and reduced absenteeism.

Our new report, Low Pay in the Charity Sector, reveals that:

A third of women (30.4%) in the charity sector earn less than the real living wage compared to just a fifth (21%) of men. This is higher than the UK average across sectors (27% women in low paid work) despite women making up the majority (65%) of the workforce in the sector. Overall, almost three quarters (73%) of low-paid charity sector workers are women.

Charity workers below the age of 25 are much more likely to experience low pay, with more than half (52.4%) of those between 20 and 24 earning below the real living wage, although this does compare favourably with the workforce as a whole (58.4%).

Part-time workers are more likely to be affected by low pay (42.7%) compared to just under a fifth (19%) of full-time workers in the charity sector.

Smaller charities are more likely to pay below the living wage, with majority of low paid employees (77.2%) working for charities with less than 50 employees; higher than in the wider economy (62.3%).

Whilst over 800 charities – such as Macmillan Cancer Support, Dementia UK, Carers UK and Crisis – are already leading the way as accredited living wage employers, there is much more that needs to be done to ensure that charities can pay staff the living wage.

Whilst it can be difficult for some charities (especially smaller ones) to pay the living wage, there are things that can be done to support them to do so. We hope to see more funders and commissioners to enable the real living wage, by becoming living wage friendly funders; and funding posts at the living wage rate. There are now 31 friendly funders promoting living wage through their grant-making, including People’s Health Trust, Comic Relief, six local authorities (though currently none in Scotland), the Big Lottery Fund, SSE, Standard Life and Lloyds Bank Foundation.

We hope you’ll help us to champion the Living Wage in the charity sector. There are lots of ideas for getting involved in our new report and you can also get involved online using #LivingWageWeek and #FriendlyFunders.

To find out about becoming an accredited employer please contact the Scottish Living Wage Accreditation Initiative.