- New research from the Living Wage Foundation reveals that 42% of workers earning below the real Living Wage, around 2.2 million people, have less than £10 left over after paying for their essentials.
- The research also found that 58% of workers earning below the real Living Wage, around 3.1 million people, are unable to afford an unexpected necessary £850 expense.
- £850 equates to just over two weeks’ of earnings for those on the government’s “National Living Wage”, the current legal minimum for those over 21.
- This news comes just a week before the Living Wage Foundation’s announcement of new rates for 2023-2024, which will be announced on the 23rd of October. The Real Living Wage, set by the Living Wage Foundation, is voluntarily paid by over 15,000 accredited employers.
New research from the Living Wage Foundation highlights the precarious financial situation of the UK’s lowest paid workers. Polling of 2,000 workers earning less than the real Living Wage, conducted by Survation, revealed persistently high levels of hardship.
The polling shows that more than half of respondents reported feeling worse off than last year, with 42% having less than £10 left each week after essential expenses, including housing, food, utilities, and transport.
58% of workers—and 63% of women—cannot afford an unexpected £850 expense, such as a boiler repair, car maintenance or a large vet bill.
The findings suggest most low paid workers have no buffer should they suddenly lose their income, a worrying sign as unemployment reaches its highest level in three years.
Many low paid workers are already facing extreme hardship:
- Two in five low-paid workers have used a food bank in the past year, with 28% relying on them at least once a month. This rises to over half in London.
- One in three have skipped meals for financial reasons in the past year.
- 31% have fallen behind on household bills.
- 24% have been unable to heat their homes due to financial constraints.
The polling found that low paid workers’ dire financial circumstances are taking a heavy toll on their mental health:
- 67% said their pay had a detrimental impact on their mental health.
- 67% reported increased anxiety levels due to their financial situation.
- 65% experienced negative effects on their sleep.
- 53% reported that their pay negatively affected their relationships.
These findings come just weeks ahead of the Living Wage Foundation’s announcement of new Living Wage rates for 2024-2025, independently calculated based solely on living costs. Currently, the Real Living Wage is £12.00 per hour in the UK and £13.15 for those in London, with expected increases reflecting rising living costs.
The survey results found that 52% of workers surveyed indicated that increasing their pay is the most important thing their employer could offer them. Three in five (62%) believe that being paid in line with the cost of living would improve their mental health, reduce anxiety (59%), enhance the quality of their sleep (56%), and boost their physical health (54%).
Katherine Chapman, Director of the Living Wage Foundation, said: “Today’s research highlights the stark reality facing millions of low paid workers, who are treading water and struggling to afford life’s essentials. The real Living Wage is the only UK wage rate calculated solely on the cost of living and is a lifeline for workers and their families, enabling people to live not just survive. It means being able to cover an unexpected bill or buy a gift for a child’s birthday – things many of us take for granted.
Despite the tough economic landscape, it’s heartening to see the Living Wage movement grow to over 15,000 employers this year. Living Wage employers know that when their employees thrive so does the organisation. We’d encourage more employers out there to sign up - the real Living Wage is good for people, good for business and good for society.”
Sam, works at Living Wage accredited employer Thomas Kneale, said: “Having worked as a temp on a low paid, zero-hours contract earlier in my career, I know firsthand the challenges living on a low, non-guaranteed income can bring and the effect these challenges can have on a person’s health & wellbeing and general enjoyment of life.
I rented and lived in some very unpleasant properties, I was unable to go on holidays, I rarely went out, I was constantly having to choose between one bill or another, I was always cancelling appointments as I couldn’t afford to get there and even putting off Drs appointments until payday as prescriptions were too expensive. Safe to say all of this had a really poor effect on my health and overall outlook on life.
Now I'm paid a real Living Wage, these problems no longer exist. I am excited about my future, I am now settled in a comfortable home, I have been on holiday a couple of times this year and if I want to go out from time to time I can. Now all my bills are all paid by direct debit, and I can live my life on my own terms without the stress and anxiety of living with no money.”
Brett Mendell, Managing Director of Living Wage Employer Thomas Kneale & Co Ltd, said: "We truly believe that paying the real Living Wage is the most crucial starting point for any organisation. It allows colleagues to earn a fair days pay for a fair days work, and with that not have to live pay cheque to pay cheque, struggling to pay regular bills. But in fact, having the ability to afford to save for an unexpected bill, have a night out, and be able to pay for things beyond the basics. Our colleagues tell us that by being looked after by the organisation, they feel settled and don’t need to look to move on to another job because it pays a little higher. With this loyalty comes the desire to be more productive, resulting in higher output, lower absence and labour turnover, and lower recruitment and training costs, so not only is it crucial for colleagues, but there are also many business benefits as well."
Kristina Maculska, catering team at Living Wage employer London Stadium, said: “The real Living Wage makes a real difference to me and my family especially when the cost of living is so high, particularly in London. The real Living Wage has a positive impact on my motivation and productivity at work. Additionally, it helps to feel secure about tomorrow and maintain stable mental health, which is important for healthy relationships with colleagues and family.”