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.

@Startingagainandagain I don't work for a charity.

I can't really leave (and not just because of mat leave payback). My employer offers a good defined benefit pension (which is important to me), and very generous annual leave (40 days per year), which I really need. I'm a single mother with three young children, and I could not work the hours that are worked in a standard law firm (I am full time though). Obviously these benefits apply to everyone working there whatever their band/region (which they 1000% should do). I just think it's unfair that I don't earn much more than those on admin salaries, when I do have far more responsibilities, in practice far more hours, and yes, skills, qualifications and experience.

So you're on a really good deal then but you still want to moan - you have a choice and you are choosing to stay - so we'll assume you are making a rational choice and that your employer is offering you more than you can get elsewhere. But you still think you deserve more? Why?

Well you’re choosing excellent benefits over pay. You’re likely to have to work the longer hours with less leave in a company which has the higher pay. it’s a choice lots of us in professional jobs have to make and you have to pick what’s right for your family, but you can’t then complain that you don’t get the pay too.

@faroutnow @Overthebow The fact remains that I don't feel treated fairly compared to admin. And despite all the response, I don't think it's right or fair that the London weighting is fixed. The London weighting is not just for transport, but to take into account the general extra expenses of London to "even out" salaries. I don't think making it fixed does this, or is fair.

At many companies you can buy extra leave. I can buy two extra weeks on top of the 28 (plus public holidays) that I am contractually entitled to. You don’t have to work in a law firm, your pay is low for an in-house role.

@Boohoo76 But my issues that those lower downish have exceptionally good pay (along with good - and the same - benefits as me). The London allowance being fixed is a major part of this.

Do your nursery charge more per day because you earn more?

The London weighting is to cover the higher costs. They don't go up with your salary, so the amount you get paid shouldn't; either.

You not feeling fairly paid is a separate issue.

Seems fair to me. I live near (but not in) London. An annual train ticket would cost almost £6k. Therefore the extra cost for me to work in London is £6k.

Of course I could choose to move to London and not spend that much on travel. But the increased housing would be more I'd imagine.

By the same token you could (technically) choose to move out of London and travel in. Or move to another office. Or a better company.

As a fellow single parent I appreciate that moving away isn't necessarily that easy.

Based on what you have said I'm actually cross that a so called charity is paying out for London staff. They should relocate to a cheaper location

You sound a bit delusional tbh, wanting all the benefits of your existing role - big pension, ridiculous amount of AL, less hours than other lawyers in different sectors- but higher pay as you think you're 'worth more'. The fact you're a single parent to three children and have all these qualifications isn't relevant, at the end of the day it's your choice not to look for a higher paying role elsewhere. Saying you 'can't' leave is ridiculous, you have just chosen to forgo higher pay elsewhere for more flexibility in your current role and are now trying to have your cake and eat it too. There are a couple of people like this on my team at work - constantly complaining they are underpaid based on xyz reason. We calibrate salaries based on performance and market rates for the role, and my response to them, after the first few discussions, is simply to suggest to them to get a job elsewhere or if they are unwilling or unable to do that, to make peace with their pay.

Very possible. I work in healthcare and have met a fair few dim doctors

You’ve clearly weighed the financial costs of the benefits and decided that they are worth more than any uplift in salary you’d get elsewhere.

I don’t mean this rudely but are you doing a job that you’re technically over qualified for because of your circumstances and employer benefits? What I mean is, you said that you have 20 years experience and is your job one that could be done by someone with 10 years experience instead? Is it a matter of you hanging in there until your children are older and you can spend more time working on your career?

No, they don't. They really don't. You're on £60k. That means that if you work a 40 hour week, you're on about (not exactly) £29 per hour, or £230 per day. So your 40 days annual leave is £9200. If they are on £28k, they're on about £107 per day, so their annual leave is £4300. They are paying in to a smaller pension.

You're being selfish and entitled.

That’s kind of worrying.

You're shouting into the void.
Fixed amount for London allowance is normal.
My husbands company does fixed London allowance and the pay range is absolutely enormous, from minimum wage to millions.
Why don't you start a conversation with your manager about your actual pay being too low considering you do extra hours etc.
Though it sounds like you have a pretty great deal all in considering the enhanced maternity pay, pension and number of holidays.

@mitogoshigg I do not work for a charity. I have already said this. Also, they have offices throughout the country - about 10 in various major cities - and they need to have offices everywhere to provide their services.

'@LewishamMumNow 'I don't work for a charity' '

Your initial post starts with 'I work in a third sector organisation'...

So that implies a charity, social enterprise, community group or housing association.

@RiderOfTheBlue Holding different opinions does not make you dim. I don't think the way the London Weighting is paid is fair. Others don't agree, but that doesn't make you dim.

@Startingagainandagain Yes, I would in the third sector. But not for a charity, and not for any of the organisations you list, or for any other organisition which receives public money.

I assume the charity was originally based in London and/or is a charity focused on London issues?

If it moved itself out of London, then lots of Londoners would be unemployed. It would especially affect the lower paid Londoners (who wouldn't have the money to relocate especially as there's a local connection rule for social housing, and also they have family there).

From what I understand London has one of the highest youth unemployment rates in the UK. So why add to that?

Re OP's question. Surely the staff on the lower salaries struggle more with general London living costs especially housing, so need a higher percentage of the weighting. I know someone renting in London. Single man in a 1 bedroom flat (in a less expensive part of London). His landlord wanted a tenant on a minimum of £35K.

Whether the London weighing as a whole is enough, whatever salary level, is another question, but I think it's right that the lowest paid staff get a higher percentage

Agreed. If anyone needs the extra it's the poorly paid. Not your £100k a year people.

@Windchimesandsong I do not work for a charity. My organisation has a nationwide presence, and needs to be based where it provides services. Hence offices throughout the land.
@Viviennemary I do not earn anything close to 100k, and nor am I asking to be.

We all get £4k irrelevant of what salary we are on. CEO is on £380k I'm on £43k we both get the same.

Often more senior roles (including yours?) are more easy to get a transfer for. If you're unhappy in London or finding the cost of living there too much (housing, I guessing?), would you consider asking for a transfer to one of their regional offices?

(I understand that's not necessarily workable for you, eg. children settled in school, if you're in a relationship your DH or DP's job may be based in London, and if you're from London maybe grandparents are helping with childcare, etc.).

I think the lower paid staff should get more. It's a lot easier to afford to live in or commute to London on £380K than on £43K.

I don't know much about London weighting but tended to assume it was proportional to pay level. I think that would be fairer.