The Chancellor announced that the legal minimum wage - which the government call the National Living Wage - will rise to £12.21 an hour in October 2024's budget.
This is welcome news for those on the lowest incomes. But it's important to remember that this is the bare minimum that employers legally must pay their workers.
It still falls short of the real Living Wage and the cost of living - especially in London.
With a number of different 'Living Wages', it can get confusing. Here we break down the different types, and explain why employers should pay everyone at least the real Living Wage.
What's the National Living Wage?
The National Living Wage is the minimum wage for people over 21 throughout the UK. It's the statutory wage rate. This means all employers have to pay employees over the age of 21 at least the National Living Wage by law.
Currently the National Living Wage is £12.21 per hour. The rate is the same across the whole of the UK. There's no London weighting, despite the higher cost of living in the capital.
What's the real Living Wage?
The real Living Wage rate is calculated based solely on the cost of living. It's a voluntary wage rate, which means employers don't have to pay it, but they can sign up to become a real Living Wage accredited employer.
There's a higher rate for workers in London to reflect the greater cost of living for people in the capital.
The real Living Wage is £12.60 across the UK and £13.85 in London (the London Living Wage).
More than 15,000 employers are accredited by the Living Wage Foundation, voluntarily going beyond the minimum wage to pay their employees fairly.
Why is it important to pay the real Living Wage?
Paying the real Living Wage is the single most important thing employers can do to help lift people out of poverty. It's the only wage rate that reflects the cost of living. The real Living Wage helps to lift people out of poverty, enabling people to have choices, live with dignity and feel included in society.
At least half a million people in London are paid less than the London Living Wage. In-work poverty remains all too common across our capital city.
By getting accredited as a Living Wage employer, organisations show that they want to go beyond the legal minimum to help tackle this problem. They also become part of a fantastic movement of people doing business the right way.
Find out more about the Living Wage on the Living Wage Foundation's website.