Mark Jones
Overview
The £10.20 per hour rate for the London Living Wage marked a significant milestone when it was announced in November 2017. At the time, the increase reflected growing concerns over housing costs, transport expenses, and everyday living pressures facing workers in the capital.
Today, the voluntary “real” London Living Wage stands at £14.80 per hour. Set independently by the Living Wage Foundation, this rate is designed to reflect the actual cost of living in London rather than the legal minimum wage. Workers and employers can also verify whether a company is an accredited Living Wage Employer through the Living Wage Foundation’s accreditation program.
The 2017 increase represented an important turning point in the wider Living Wage movement, encouraging employers across the United Kingdom to commit to fair pay and helping thousands of workers better cope with rising living costs.
Understanding the 2017 Real Living Wage Increase
When the Living Wage Foundation announced that the UK Living Wage would increase to £8.75 per hour and the London Living Wage would rise to £10.20 per hour, it was more than just another wage update. It reflected a growing recognition that millions of workers were struggling to keep pace with rising living costs.
As someone who closely follows employment trends and workplace policies, I found this announcement particularly important because it highlighted a challenge many households were facing: wages were not always keeping up with inflation, housing costs, and transport expenses.
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The increase provided welcome relief for thousands of workers across the United Kingdom while encouraging employers to invest more heavily in fair pay practices.
What Is the Real Living Wage?
The real Living Wage differs from the government’s statutory minimum wage.
Rather than being set by legislation, the Living Wage Foundation calculates the rate independently based on the actual cost of living. The calculation considers factors such as:
- Housing and rent costs
- Utility bills
- Food prices
- Transport expenses
- Family living requirements
- Inflation trends
The goal is simple: ensure workers earn enough to meet everyday living costs.
In 2017, the UK Living Wage increased from £8.45 to £8.75 per hour, while the London Living Wage rose from £9.75 to £10.20 per hour.
The increase represented:
- A 3.6% rise for the UK rate
- A 4.6% rise for the London rate
At the time, the London Living Wage was £2.70 higher than the legal minimum wage for workers over 25 years old.
Why Were Living Wage Rates Increased?
Rising Inflation Was a Major Factor
One of the biggest drivers behind the increase was inflation.
Everyday essentials were becoming more expensive, and workers were feeling the pressure. The cost of groceries, transportation, utilities, and other necessities continued to climb.
Many families found themselves earning roughly the same wages while spending significantly more each month.
Housing Costs Continued to Climb
London’s housing market remained one of the most expensive in Europe.
Private rents were increasing steadily, placing enormous pressure on low and middle-income households. For workers living in the capital, housing often represented their largest monthly expense.
The London Living Wage increase was specifically designed to reflect these higher living costs.
Transport Expenses Added Further Pressure
Commuting costs also played a role.
Whether traveling by train, bus, or underground services, workers across London and other parts of the UK were spending more simply to get to work each day.
The Living Wage Foundation factored these realities into its calculations.
Millions of Workers Were Still Earning Below the Living Wage
Research published by KPMG around the time of the announcement revealed a concerning picture.
Approximately 5.5 million workers across the United Kingdom were earning less than the real Living Wage.
That equated to roughly one in five workers, or 21% of the UK workforce.
These figures helped draw attention to the growing issue of in-work poverty.
What Is In-Work Poverty?
In-work poverty occurs when people are employed but still struggle to afford basic living costs.
Many workers hold full-time jobs yet continue to face financial hardship due to:
- Low wages
- Rising rent
- Increasing household bills
- Childcare costs
- Transport expenses
The Living Wage movement emerged as one practical response to this challenge.
Heathrow Airport Becomes the UK’s First Living Wage Airport
One of the most notable announcements during Living Wage Week 2017 involved Heathrow Airport.
The airport became the first accredited Living Wage airport in the United Kingdom.
This was a landmark moment for the Living Wage Foundation and represented a major commitment to responsible employment practices.
What Did Heathrow’s Commitment Mean?
Heathrow pledged that approximately 3,200 airport workers would benefit from Living Wage pay standards by the end of 2020.
The accreditation demonstrated that large employers could implement fair pay policies while continuing to pursue growth and expansion.
John Holland-Kaye, Heathrow’s CEO at the time, emphasized that investing in workers was essential for maintaining world-class service standards.
The initiative also aligned with Heathrow 2.0, the airport’s long-term sustainability strategy.
The Growing Influence of the Living Wage Foundation
The Living Wage Foundation’s influence expanded rapidly during this period.
By 2017:
- More than 3,600 employers across the UK had been accredited
- More than 1,000 employers were accredited in London
- Over 150,000 workers were expected to receive pay increases
- More than £613 million in additional wages had been delivered to low-paid workers since the movement began
Those numbers highlighted the growing momentum behind the campaign.
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Living Wage Foundation Director Katherine Chapman emphasized that fair pay benefits both employees and businesses.
According to the Foundation’s research, accredited employers frequently reported improvements in:
- Staff retention
- Recruitment success
- Workplace morale
- Employee motivation
- Corporate reputation
These findings helped challenge the misconception that higher wages only create additional costs.
Major Employers Supporting the Living Wage Movement
Another reason the movement gained credibility was the growing number of respected employers participating.
Accredited Living Wage employers included:
- IKEA
- Aviva
- Nationwide
- LUSH
- Diageo
- Landsec
- Arriva Rail
- Rambert
- Slush Puppie
- JLL
- National Gallery
- Somerset House
The diversity of participating organizations demonstrated that Living Wage principles could work across multiple industries.
From global corporations to cultural institutions and small businesses, employers increasingly viewed fair pay as a competitive advantage.
Sadiq Khan Champions the London Living Wage
London Mayor Sadiq Khan played a prominent role in promoting the new London Living Wage rate.
He celebrated the announcement at LUSH’s Oxford Street store, one of many employers that had recently committed to paying the real Living Wage.
Khan consistently argued that workers should earn enough to cover the realities of living in one of the world’s most expensive cities.
His support helped strengthen awareness of the Living Wage movement throughout London.
Support Across Scotland, Wales, and English Regions
The Living Wage campaign extended far beyond London.
Leaders across the UK supported the annual rate announcement, including:
- Nicola Sturgeon, First Minister of Scotland
- Carwyn Jones, First Minister of Wales
The initiative also received backing from regional leaders in:
- Greater Manchester
- Liverpool City Region
- Cambridgeshire and Peterborough
This nationwide support demonstrated growing recognition that fair wages are essential for economic stability and social wellbeing.
Why Fair Pay Matters More Than Ever
Looking back, the 2017 Living Wage increase represented more than a simple wage adjustment.
It highlighted broader issues affecting workers across the UK:
- Rising inflation
- Housing affordability challenges
- Transport costs
- Income inequality
- In-work poverty
The announcement also showed how employers, governments, and advocacy organizations could work together to improve living standards.
In my experience researching labor market trends, one lesson remains clear: workers who feel valued and fairly compensated are more likely to stay engaged, productive, and committed to their employers.
Quick Takeaways
- UK Living Wage increased to £8.75 per hour in 2017.
- London Living Wage increased to £10.20 per hour.
- Heathrow became the UK’s first Living Wage airport.
- More than 150,000 workers were expected to benefit.
- KPMG found 5.5 million workers still earned below the real Living Wage.
- Over 3,600 employers supported the Living Wage movement.
- More than £613 million in additional wages had been delivered since the initiative began.
Conclusion
The 2017 Living Wage announcement marked a significant milestone in the UK’s effort to tackle low pay and rising living costs. With Heathrow Airport becoming the first Living Wage airport, support from London Mayor Sadiq Khan, and growing participation from major employers such as IKEA, Google, Aviva, Nationwide, and LUSH, the movement gained substantial momentum.
While the rates of £8.75 and £10.20 may seem modest by today’s standards, they represented an important step toward ensuring workers earned wages that better reflected the realities of everyday life.
As living costs continue to evolve, the principles behind the Living Wage remain as relevant as ever: fair pay, dignity at work, and economic security for working people.
What are your thoughts on Living Wage policies? Do you believe more employers should adopt the real Living Wage? Share your perspective and join the conversation.
Frequently Asked Questions
Is the Living Wage the same as the minimum wage?
No. The Living Wage is a voluntary rate independently calculated by the Living Wage Foundation based on the real cost of living, while the minimum wage is set by the government.
Why is the London Living Wage higher than the UK Living Wage?
London has significantly higher living costs, particularly for housing and transportation. The London Living Wage reflects these additional expenses.
How can I check if a company is a Living Wage Employer?
You can verify whether an employer is accredited through the Living Wage Foundation’s official accreditation directory.
