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.

I don't disagree with you, it bonkers we all get the same.

So move there.

I can understand why OP might not be in a position to easily just move somewhere else.

Especially if she and/or her DH/DP (if she has one) has a job that can't be moved, or grandparents providing childcare, or she's helping care for elderly parents.

Also I guess if lots of people moved somewhere else, so would the problems. Added pressure on jobs and housing and infrastructure including transport where loads of Londoners moved to.

It's not good either for London (or anywhere else) to become somewhere only the wealthiest (and very poorest in substandard slumlord housing) can live.

I admit I don't know much about the London weighting and I'm not in London (saw this thread on Active) but it doesn't seem like it's perhaps enough nowadays, and also doesn't seem like it's applied in the best way. I think OP's perhaps right that it should be a bit higher, but also I think it's right that the lowest paid staff get proportionally more.

Although I suppose really the answer is addressing the high cost of living (not just London). UK should have more affordable housing and more affordable train fares. Commuting to London is I understand expensive, and train travel in the UK in general is more expensive than many other countries.

The London weighting issue sounds like a red herring. You’ve said yourself that your issue is that the lower downs get paid well with the exact same benefits as you. Sounds like you really begrudge that! As others have said look elsewhere if you’re not content with your salary but it comes across as so selfish begrudging those who you deem superiority over a decent wage and terms.

The bristol person presumably has cheaper prices. Though I hear lots of people are moving there from London and pushing prices up

The housing costs in London can easily be double some parts of the country. Bristol is one of the more expensive areas outside of London such as Brighton, Oxford and Cambridge.

Though I hear lots of people are moving there from London and pushing prices up

That's the consequences of people being told to just move when they post about London being unaffordable. Seen it in loads of threads.

No one moves to Brisol based on a mumsnet post?? AFAIK there's a lot more going on in London? Or am I wrong an Bristol is where it is at?

@alpacachino I don't know. I don't live in London or Bristol. I just see lots of people in London being told "just move" when they post here about struggling to afford housing or other living costs.

I imagine even if it's still expensive, Bristol is still cheaper housing than London? Maybe not anymore - partly I guess as a consequence of priced out Londoners moving there.

That's why it's no good telling people to just move. That's relevant for other places, not only London.

Related, the issue with London weighting not necessarily being enough. I'd say the way to address both problems is more affordable housing in the UK and more affordable train travel.

£28k for admin is not exceptional, according to Glassdoor
The average salary for Administrative is £28,753 per year in the London.

I thought London weighting had pretty much gone. I'd agree it's not specifically fair since other cities these days can be considerably more expensive now.

But I don't think for a second it should increase with salary. The more you earn the more disposable income you should have. IF you chose to use that to create a family with children and a spouse and a big house - that's simply how you've chosen to use your salary. It doesn't mean you should expect to have more of that covered.

Yeah we should all spread out a bit and build a new city somewhere

I'm a pay consultant. Explicit London weighting is rarely anything except a fixed amount. As you get to more senior roles, other factors become more important in determining pay - grade, responsibility, specific expertise etc..

Ultimately, the organisation needs to pay an appropriate amount for the skills and contribution relative to the pay market. It's not incumbent on it to offer the same standard of living to all its employees regardless of location. For example, a senior legal role in London (private sector) might well be paid 10-20% more than an equivalent role in the same company in Bristol. Birmingham or Manchester - but the non-London person will still be able to afford a better house and that's not the employer's problem!

I thought London weighting had pretty much gone. I'd agree it's not specifically fair since other cities these days can be considerably more expensive now.

I'm getting too invested in this thread now! Just decided to have a look and it seems London is still the most expensive for housing (which is usually the biggest expense, unless someone's commuting to London - and then there's expensive train fares).

London continues to have the most expensive property prices in the UK, at an average of £536,056, an annual increase of 1.5% in August compared with last year.

https://www.theguardian.com/business/article/2024/sep/06/uk-house-prices-hit-two-year-high-as-market-recovers-from-truss-mini-budget

I think a single London weighting payment for everyone sounds fair and reasonable.

OP says it isn’t a charity. And they obviously have multiple offices outside of London as well, so presumably there is a good business reason for them to maintain the London office too. Maybe it’s a housing association or something like that, which needs a physical office close to their actual clients?

Yes, agree with this.

OP, it’s not a problem with your company being unfair. London weighting is pretty much always just a flat rate regardless of grade. And over 6k is a pretty big London weighting too. Mostly they’re just a small sop to take the edge of increased travel costs, or to make people feel better about living somewhere more expensive. In no way does it ever attempt to “allow you an equivalent lifestyle” to the same role in another city. You might wish it did, but no company has a London weighting that does this.

You’re lucky that the other benefits are great, and that you maybe have the option to transfer to a different office to do the same role.

My colleagues up north of same grade get 6k less and trust me their salary gets them a lot more than mine in London. Hence I’m moving north once youngest goes to Uni in 2026. I’ll never be well off in london

Gone? Not at all. We still have london location allowance. Doubt they’d ever get away with scrapping that given the additional costs of living in the capital

Flat rate in universities. If anything it should be higher not lower for those on lower salaries as they will struggle more in London.

I recruit in the Civil Service (30+ years of experience) and interestingly the London jobs are increasingly difficult to recruit new graduates for.
The 3k weighting is not enough to tempt people into the typical £32k EO starting role. They choose other locations at £29k. Manchester is most popular.
There is a minimum level at which people can make a life and the draw of London isn’t enough to attract young people when they will have to room in a house with an hour of expensive commute.
The CS won’t increase LW though as the Levelling Up aims are to slowly move away from London.
Am in London myself and would happily move to Stoke for my last few years if my department moved up there. Would leave my adult DC homeless though!

As others have said. Your issue is that your base pay is not competitive in London for your role and qualifications. The london weighting isn't the issue and I'm surprised you can't see that despite it being pointed out numerous times!

Sounds more like Stone King or another legal firm that specialises in education, charities and religious organisations.

@LewishamMumNow

Personally I think you are focusing on the wrong thing. Location Allowances are typically flat rate based on a number of factors. The cost of travel into central London is the same regardless of your job/salary. The cost of living actually affects the lower paid more.

There are a number of factors you need to think about.

• are being paid appropriately for your job? If not, a market rate supplement (allowance) or a skills allowance may be appropriate. There are companies that provide benchmarking information.
• are you comparing like for like? Compare your total reward package rather than specific elements.
• if people WFH be it hybrid or full time should they get the full/any London Allowance?
• Reward is about attraction, retention and motivation. If the reward package doesn’t motivate you then either make a business case with costings or find a job that has the reward strategy that attracts, retains and motivates you.

I work for company that covers all of UK I live in hertfordshire so office in London we don't get london weighting allowance and as 11 years back we were paid more now companies have joined south east based employees get hardly any pay increases where Northern and south west and Scotland get high wage increase I was 5 years ago able to maintain house and have cheap holiday now no holiday house falling to bits sometimes can't afford food I work full time for big organisation been told this week pay rise will be minimal due to labour national insurance rise which labour said tax businesses not people are they really that thick to realise employees would suffer businesses can't afford to hire so more unemployed but don't worry they will stop supporting sick people and tax pensioners great plan