Real Living Wage 2026/27: How It Differs From the National Living Wage

The detail

These are two different things that are easily confused. The National Living Wage is a legal minimum set by the government on Low Pay Commission advice - employers must pay it. For 2026/27 it is £12.71 an hour for workers aged 21 and over. The Real Living Wage is a voluntary rate set by the Living Wage Foundation and calculated on what people actually need to cover the cost of living - employers can choose to pay it but are not required to.

For 2026/27 the Living Wage Foundation set the Real Living Wage at £14.10 an hour across the UK and £15.45 an hour in London, where housing and transport costs are higher, up from £13.45 and £14.80 in 2025/26. Both are above the £12.71 statutory floor: the UK Real Living Wage is £1.39 an hour more, and the London rate £2.74 an hour more.

The rates were announced on 15 October 2026, and employers have six months to implement them, by 1 May 2027. Nearly 17,000 UK businesses pay the Real Living Wage voluntarily. The Foundation recalculates the rates each autumn, so they can rise faster than the statutory minimum in high-inflation years. For 2026/27 it reviewed the method: the rates now combine the Minimum Income Standard (a basket of goods and services the public says is needed for a minimum acceptable standard of living) with the poverty threshold of 60% of median household income after housing costs.

For a full-time worker on 37.5 hours a week, the difference is meaningful: the £12.71 National Living Wage annualises to roughly £24,800, the £14.10 Real Living Wage to roughly £27,500, and the £15.45 London rate to roughly £30,100 (illustrative, 52 weeks, before tax). To see the take-home pay at any of these hourly rates, use our hourly-to-salary calculator.

Note the naming trap: the government deliberately branded its statutory minimum the "National Living Wage" in 2016, which is why it sounds like the Living Wage Foundation's figure. They are set by different bodies, calculated on different bases, and only the government one is legally enforceable.