20 October 2026
With all eyes turned to the highly anticipated 2026 Autumn Budget, businesses and individuals alike are eager to see how their economic futures may be influenced.
Something that is an early sign of things to come is the announcement of the latest Real Living Wage, a scheme established by the Living Wage Foundation.
While not directly connected to the Government, the Real Living Wage may put pressure on the Chancellor to increase wages, which in turn could impose further challenges for businesses.
How influential is the Real Living Wage?
Entirely separate from the Government, the Real Living Wage purports to be the only independently calculated salary that is directly tied to the cost of living.
On 15 October 2026, the Real Living Wage was updated to be £14.10 per hour for workers above the age of 18 and £15.45 for those working in London.
These figures now sit further above the Government’s own minimums, as the current National Living Wage (NLW) is only £12.71 per hour for those over 21 and £10.85 for those aged between 18 and 20.
When these figures are translated into annual salaries, the Real Living Wage sees workers earn between £27,495.00 and £29,328.00, depending on whether they work a standard 37.5-hour or 40-hour week, and those on the NLW earn between £24,784.50 and £26,436.80 for the same number of hours.
The Real Living Wage was established by the Living Wage Foundation and the Resolution Foundation and has been adopted by 17,000 businesses on a voluntary basis.
While it is unlikely that the Real Living Wage will become the statutory minimum, its existence is credited with the creation of the NLW and has been known to indicate when a pay rise is necessary.
Will businesses be able to afford another increase in employment costs?
The question of being able to afford to pay workers more is where a discussion of the upcoming Autumn Budget plays a more important role.
Employees would clearly like to have more money in their pockets each month, if only so they have something left over once all of the bills are paid.
However, those same bills are eating into the margins of businesses, meaning that higher wages do not always feel possible.
Yet in an ouroboros of economic frustration, lower wages mean less spending power, which means less money for businesses, which means lower wages.
Pay compression makes the matter worse as graduates can often feel overlooked entirely when the question of pay increases is being discussed.
The Resolution Foundation notes that the early 2000s saw “the median graduate in a ‘graduate job’ have a salary 2.5 times that of a minimum wage worker, but by 2023, the typical graduate earned only 1.6 times the salary of someone on the wage floor.”
Lower-paid graduates may find their wage barely above the minimum, as “those at the 10th percentile of earnings now have salaries just 11 per cent higher than someone on the wage floor, compared to 82 per cent higher back in 2001.”
If the annual salary of the Real Living Wage caught your eye, it is likely due to the median graduate salary for UK graduates in full-time employment 15 months after graduation was £28,500 in 2022/23 – meaning many graduates will be paid below the current Real Living Wage.
Businesses way wish to address these concerns, in fact 68 per cent of employers say paying a Real Living Wage has improved their recruitment outcomes, but might not have the financial means to do so.
Getting expert accounting support is vital for handling the full range of challenges and obligations that make running a business more difficult.
There was notable frustration with the previous Autumn Budget and Spring Statement in the way that they seemed to overlook the needs of small businesses.
While it can be hoped that the upcoming Autumn Budget changes things, there is no guarantee that announcements will be a net positive for businesses.
Our expert team will bring together all of the announcements and help you to understand the impact they will have on your business.
We can assist you with reliable budgeting, backed up by clear financial forecasts that will help you to make important decisions with confidence.
Whether those decisions end up being based on increasing salaries, investing in the business, or just clearing out debt, we can support you.
Get in touch with our team for expert guidance through the Autumn Budget and for support with rising employment costs.
