Late last year we learned about the planned increase in the National living wage, set to boost the income of low-paid workers around the country. It was announced that rates from April 2023 will rise to £11.44, representing an increase of £1.02 or 9.8%.

This will be the largest ever increase in the minimum wage in cash terms and the first time it has increased by more than £1. The size of this increase is driven by the strength of pay growth across the economy, which is forecast to continue into next year. (

A lifeline for low paid workers

Despite inflation easing, research from the Living Wage Foundation shows that the cost-of-living crisis is far from over for Britain’s 3.5 million low paid workers. Construction workers in some cases received little to no wage uplift due to a decrease in Q4 output as recession is confirmed, and ONS data revealed that the construction sector experienced the weakest growth in average earnings in 2023.

With UK households warned of a further rise in energy bills as record numbers struggle with debt and over 4 in 10 workers (42%) being worried about losing their jobs, more than half of low paid workers said receiving a pay rise in line with the cost of living would have a positive impact on their quality of life, relationships, mental- and physical health, with 65% saying it would make their overall quality of life better. 

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As inflation eases, we cannot forget that low-paid workers remain at the sharp end of the cost-of-living crisis.

Low-paid workers continue to struggle with stubbornly high prices because they spend a larger share of their budget on food and energy.

These new rates are a lifeline for the workers who will get a pay rise.

Katherine Chapman
Living Wage Foundation director

Sarah Bolton Chief Operating Officer of the Lighthouse Construction Industry Charity commented on the twofold impact of financial pressures faced by the industry’s workforce:

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Ultimately the increased running and material costs for construction companies are passed down to the trades and reduce the amount of work and income available. The resulting reduction in income and increase in costs put excessive financial pressure on our workers, leading to increased debt and worsening mental health as they struggle to cope.

In 2022, 37% of calls to our helpline were for immediate financial support and we expect the final figures for 2023 to be higher. Whilst we can’t change events that continue to have an impact on our economy, we can ensure that our workforce is equipped with the soft skills and tools to help them navigate these uncertain times. We have introduced three new modules to our Wellbeing Academy, borrowing, controlling credit and tackling debt, and these all proactively support our workforce in making informed financial decisions. We also offer free and impartial information and advice through the NUDGE app and our 24/7 telephone helpline, live chat and text service. We would urge anyone who needs support to reach out at an early stage before situations escalate to crisis point.”

Sarah Bolton
Chief Operating Officer of the Lighthouse Construction Industry Charity

The good news however is that as well as a higher National Living Wage set by the UK government due to arrive, more than 460,000 workers across the country will also look forward to getting a pay rise, as the Living Wage Foundation’s successful campaign to encourage employers to play their part in tackling in-work and post-work poverty continues to make an impact. The new rate of £12 (based on what people need to live) will apply to workers at about 14,000 living wage accredited employers (including half of the FTSE 100), who adopt the voluntary pay measure.

Benefits of paying Living Wage for employers

For employers there are a host of benefits unlocked by complying with the Living Wage Foundation’s recommended £12 per hour wage, such as; improved reputation, increased motivation and retention, ability to differentiate from competitors and positive improvements to manager and worker relationships. 

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Nine out of ten businesses which pay the Living Wage said doing so has improved its reputation as an employer and almost two-thirds (63%) believe it has helped differentiate them from competitors.

A study by the Living Wage Foundation with Cardiff Business School

According to the Living Wage Foundation, one in nine people now work for an accredited Living Wage employer. And more and more organisations are signing up to lead the way, and some of our clients, especially in the construction landscape are playing their part:

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Morgan Sindall are fully supportive of the Real Living Wage, it reflects one of our core values in being a responsible business that is committed to doing the right thing. Equal and fair recompense is the first step towards creating a mutual respect, this when built upon can only lead to greater loyalty, pride in delivering quality and a differentiator from others.

It is not a surprise to state that relationships are built upon trust, recognition and reward, Morgan Sindall businesses are proud to make all three of these central in our approach when we create high performing teams and top quality supply chains.

Graham Edgell
Group Director of Procurement and Sustainability

So what does this mean for hiring managers?

The increase in National Living Wage has landed at a time where many companies are struggling to hire, with activity being slower than usual for the start of a new year, with an index of permanent placements falling to 43.4 from 45.6 the previous month and vacancies falling.

For businesses finding it difficult to attract talent in a candidate short market, creating and maintaining an attractive employer brand is crucial. In an environment where ‘cash is king’, particularly for the younger generation and entry level roles, it’s important to be able to not only illustrate compliance with the National Living Wage but taking into account what salary is needed based on what people need to live. This is in addition to ensuring other desirable elements such as work life balance, job security and training are still in place.

With over a quarter (26%) of UK employers stating they have quit a job due to low wages and pay equality being the most important ED&I initiative for those looking for new employment, higher pay, unsurprisingly remains key for attraction and retention.

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We also know paying a real Living Wage helps employers to remain competitive, retain existing staff and attract new staff. Over half of employers said paying a real Living Wage has improved the quality of applications for jobs.

Living Wage Foundation

To find out more about what the increase in living wage means for your organisation or to become accredited, visit

If you need advice from our industry experts on anything from attracting the right skills to salary benchmarking, share your details and we’ll be in touch:

about the author
Sarah Sidey
Sarah Sidey

Sarah Sidey

regional director at randstad