Perception of the Living Wage is often different to the reality.
It won’t work, you will go bust, it’s inflationary, you can’t be competitive, your staff will take advantage of you – these are just a few of the claims made by my peers and competitors when I announced my company was joining the Living Wage network of accredited Living Wage companies (later followed by Living Hours accreditation).
So how did I get on? Having sold my multi-award winning, successful and profitable business after 16 years of achieving the success people told was impossible, did I choose to settle down and retire on the fruits of my labour? The answer was a firm no! I wanted to widen the impact my business had delivered for workers, to people here in Scotland. I am now a Living Wage Scotland Projects Officer committed to a cause I passionately and deeply believe can make a genuine difference to society by encouraging more businesses to join as accredited Living Wage employers.
What is the Living Wage?
The real Living Wage is the only hourly rate independently and annually calculated by the Resolution Foundation, the latest rates for 2025/26 were announced on the 22nd October 2025. This calculation is overseen by the Living Wage Commission and is the only wage rate that reflects the true cost of living. It is based on detailed research by Loughborough University on Minimum Income Standards, assessing the cost of a basket of goods, taking into account different demography and other factors like changes in government policy on benefits or childcare for example. In Scotland and the wider UK, the rate is £13.45 for all directly employed and regularly contracted third-party staff over the age of 18 with a separate weighted rate for London of £14.80 to reflect their higher cost of living. It is not to be confused with the UK government three-tiered national minimum wage rates recommended by the low pay commission, which has separate rates for 16-17 year olds of £7.55 per hour, 18 to 21-year-olds at £10 per hour and 21-year-olds and over of £12.21 per hour. A full-time worker in Scotland earning the real Living Wage would earn £2,418 a year more than a worker earning the current national living wage.
Who pays it?
Week commencing 10th November 2025 was Living Wage Week, a recognition of the amazing network of organisations committed to paying at least the real Living Wage, like my former business. It is a week of focused celebration of the success of the Living Wage Movement. It was a pleasure and an honour to speak at Fair Work Convention’s ‘Building Scotland’s Fair Work Future’ event in Edinburgh that week. Our purpose is to work with and encourage employers from all organisations be it public, private or third sector to voluntarily accredit to the real Living Wage and our other accreditations, to deliver benefits for business and community alike whilst reducing in work poverty. In doing so we can create a stronger, fairer, connected, and united society in which everyone can thrive.
In Scotland, the employer community recognises the many benefits of accreditation, and we are punching above our weight with almost 25% of all UK Living Wage accreditations, three quarters of all Living Hours employers and almost a third of all Living Pensions employers. Whilst the Scottish Government position on procurement policy has enhanced companies’ willingness to accredit, the experience here at Living Wage Scotland is that businesses overwhelmingly join the movement because they see a moral case. This has enabled better life outcomes for over 72,000 employees Scotland wide, with more than £680 million of extra wages back into the pockets of low paid workers, spent in our local economy. Moreover, a significant majority of Living Wage employers confirm genuine business benefits. In Living Wage Week, we were able to celebrate 4000 Living Wage accredited employers in Scotland. These successes have allowed us to better understand the positive impacts for workers, employers and the wider economy and inspire us to go further and faster.
Why should an organisation accredit?
I can speak from personal experience of the business benefits that Living Wage and Living Hours accreditation delivered, including building trust, strengthened staff engagement, reduced absenteeism, increased staff morale, removing presenteeism and delivering higher productivity and increased profits. The reduced staff attrition or staff turnover rates reduced costs of recruitment and training. The uplift in staff morale reduces waste and improves quality, which in turn can reduce lost revenue through customer refunds or claims, removing substantial levels of potential reputational damage.
If you are an accredited employer, you can still go further!
The fact that despite challenging economic headwinds, businesses continue to join our growing network, demonstrates businesses see genuine benefits, whether it is through procurement opportunities or improved business outcomes, whilst having a positive impact on society.
There are three accreditations available for all employers: Living Wage, Living Hours and Living Pension. These directly correlate and form the very basis of the Fair Work Framework criteria of Security. Fair work starts with pay (Living Wage) which sends a message to your workforce, customers and suppliers that you are of good moral and financial standing. It is a facilitator to staff engagement and creates a pathway to secure work through our Living Hours accreditation and long-term security Living Pensions scheme.
To learn more about all three accreditations you can visit Living Wage Scotland | The real Living Wage or contact Chris Smallwood by email to chris.smallwood@povertyalliance.org or call 07483 518564.