London Allowance: is a fixed amount for everyone fair?

[LewishamMumNow]

I work in a third sector organisation with offices in about 10 places around the country. I'd guess around 40% of staff are in the London office. They pay a London Allowance of c£6,200 to everyone. So, for someone starting off at the absolute bottom band of admin it's about 40% of their salary. For some mid-ranking like me (I'm on c60k), it's worth c10%. For more senior people it's worth less than 5%. Salaries don't go higher than c£120k, although the number of people on more than 80-90k is fewer than a dozen.
I think this is unfair. It means starting salaries at the bottom range are way higher in London that the regions (proportionately), and that as you go up the ranks you stop receiving any real allowance at all, despite all the extra expenses of London. I've raised this at work, but get met with blank stares and evil looks with everyone responding: "but the extra costs of London are the same for everyone". I just think this is nonsense, and totally unfair on people like me (plus those at the lower ends outside the capital).
What do other people think? How does your organisation do it? I think the London weighting should be a percentage of salary - somewhere between 15% and 20% would seem about right.

FWIW I'm an inhouse lawyer - in law firms the typical difference between London and non-London is at least a third extra for the London ones. I'm not asking for that. But I think a fixed amount is just wrong on every level.

But the costs are the same for everyone, so I don't see your point.

But the expenses don’t go up with your salary.

As I understood it, London Weighting was an allowance to cover things like the extra cost of transport. That doesn’t change as you earn more. It’s a fixed sum, not an enhancement of your salary. Kindly, I think you are probably looking at in the wrong way.

Agree with everyone else. There needs to be more of a bump for the lower bands to even make London affordable.
Civil Service gives about 3k I think. Doesn’t touch the sides.

The costs of London are the same for everyone though, you don’t pay more for transport etc because your salary is higher.

My organisation does the same, fixed London weighting payment.

Nope. The London weighting is the extra costs of living in London - houses, transport, food, childcare, the lot.

Sorry OP, you’re being met with blank stares because you’re talking nonsense.

But if someone at the junior ends of admin earns 22k in Bristol and 28K in London, surely that's unfair on the Bristol person? The extra costs of London are not more than 25%, which is the difference in salary.

And those costs are the same no matter that your salary is higher or lower.

The Bristol person will have cheaper housing etc and general living costs than the London person. I’m unsure why you’re confused about this.

The % of salary isn’t relevant, the inflated costs of London are the same for everyone.

But £28k in London goes further than £22k in Bristol. £66k in London goes a lot less far than £60k in Bristol. It's unfair on lower earnings outside of London and middle and higher earnings outside.

What extra expenses do you have now you are on £60k that you didn’t have on £40k?

I think this is a very fair way to do it. Your salary is more than those at the bottom of the salary range and they need to be able to afford to live in/travel into London or you won't have anyone at that level (am assuming organisation needs them there). If it's such an issue for you then I would suggest time to vote with your feet, whether that is a transfer to the regions or a new job in London outside the third sector that pays more.

@GoldenCactus My salary is more than those at the lower end because I have high professional qualifications and have 20 odd years in my profession!

To afford the sort of standard of living for my qualifications/those doing the same job as me outside of London, then I do need more than the fixed amount payable to all.

It's a huge amount for LW - public sector LW is half that!

I'd argue both transport and the sort of rent someone on £22k would be £6k more in London so it seems fair to me.

I think you’re conflating two different things:

• a flat geographic amount which is quite common. And some costs are higher for everyone regardless of grade eg London transport
• jobs in London commanding higher salaries than in the regions. Driven by supply and demand. And I think that is really your issue - an in house legal job that is competitive at 60k in Bristol may not be competitive comp at a total of 66k in London.

Maybe I’m missing something?
How do the extra costs of London living increase alongside your salary?!

It's a flat rate in the civil service.

Things like tube fares are a flat rate and for low earners take up a much larger proportion of your salary, as does accommodation. So it's perfectly fair. It compensates the most disadvantaged proportionally more.

It's not a lifestyle sub, what are the different expenses you have as a higher earner?

I think OP has worded it poorly. She is referring to the salary discrepancy between someone at the same point in their career in or out of London. The new starter earns 30% more by being based in London.

Yes. But just because you earn a lot more than someone on the lower wage and live in a bigger property, it isn't their fault that you pay a lot more for your housing than they do. Transport, food, childcare etc will be the same for everyone. How much you pay on housing is within your own remit. You are already rewarded by a higher salary but you want your employer to subsidise your housing choice as well?

You’re joking!
You think you’re due a certain lifestyle commensurate with your qualifications??
Presumably your employers pay what they think you’re worth 😬

That's an incredibly generous LLA. Ours is about £1300.

Anyway, with respect you are talking nonsense. The costs of transport, food, housing etc are higher in London but they don't go up with your salary so it makes sense it's the same for everyone.

also from a business planning pov it's the lower paid who need it more as higher waged can obviously absorb more of the cost of living.

The only way in which I think you do have a point is tax. So if it’s supposed to recompense people for the costs of travel into London or living in London, but the person on 20% tax gets about £4,500 to cover those costs, but the person on 40% tax gets about £3,000. Although £3k is probably a fair train season ticket cost.

Exactly this.

If you feel 60k + 6k London weighting isn't enough for this role, feel free to apply elsewhere.

My employer also has a flat rate, it is "the London allowance" and it is intended to cover travel and housing costs which are higher in London than elsewhere. Only 3k though. 6k is fantastic and more places should do it