Publication focus
Low pay
Living Wage
Low Pay

With sky-high inflation becoming increasingly commonplace, the UK is facing the worst cost-of-living crisis in half a century.

The crisis shows few signs of slowing any time soon, with significant drops in inflation not expected until 2023. While workers across the income distribution are feeling the squeeze, the picture is particularly bleak for the UK’s 4.8m workers earning a wage which doesn’t meet actual living costs. This is the third time we have ran the ‘Life on Low Pay’ survey to track the real-life impact of being paid less than the Living Wage. The results are concerning. The nation’s low paid are going without essentials and falling behind on bills at a greater rate than ever before, including during the Covid-19 pandemic.

Not surprisingly, the areas most impacted by the current bout of inflation are also the areas workers are making the most severe cutbacks. Energy bills – a key driver of the current cost-of-living crisis – are a key example of this, with the rate of workers falling behind on household bills and being unable to heat their homes over the past 12 months increasing dramatically. Food is another area in which low paid workers are struggling. They are more likely to report skipping meals regularly for financial reasons than ever before – with 42 per cent saying they had done this, which has increased by ten percentage points in the last six months alone. Meanwhile, over half (56 per cent) had used a foodbank at least once over the past 12 months, with 63 per cent of those who had used foodbanks saying their usage had increased. While many have expressed concern about households having to make ‘heat or eat choices’ in the coming months, the findings from our survey suggest low paid workers are already having to cut back on both.

These findings make the looming threat of higher living costs in the months and years ahead an even scarier prospect. With living costs spiralling, earning a wage that is based on the actual cost-of-living has never been more important. While the Living Wage alone cannot solve the cost-of-living crisis, these findings suggest that providing a wage based on living costs is the best way employers can provide long-term security and stability for workers.