WORKERS paid below the real Living Wage in the UK are feeling worse off than in previous years, with an increased number of people having no safety net to fall back on, according to new research from the Living Wage Foundation.
The Life on Low Pay report, out today, is based on polling of over 2,000 UK workers paid below the real Living Wage of £13.45 an hour, or £14.80 in London, and shows the increasing financial insecurity faced by the 4.4 million low-paid workers across the country.
The findings suggest that after years of cost-of-living pressures, many low-paid workers are becoming less financially resilient. Almost a third (31%) of people have no savings at all, a 29% increase on last year’s figure, up from 24%.
Emily Sawh, Co-director of the Living Wage Foundation, said:
“While inflation may have fallen, this research shows many low-paid workers continue to be impacted by the cost-of-living crisis. More people are running out of savings, relying on debt, and experiencing hardship than a year ago.
“Nearly one in three workers now have no savings at all. That leaves millions of people with little protection against unexpected bills or future rises in household costs.
“The real Living Wage remains one of the most effective ways employers can help workers build greater financial security and stability.”
The data shows that managing regular essential costs is a struggle for those on low pay, with 81% struggling with or unable to pay some or all of their bills. Just one in ten people on low pay could pay an unexpected £200 bill using current income without difficulty, meaning that anything from a broken washing machine to a vet visit would push people beyond their means.
Over a fifth (22%) of low-paid workers have less than £10 left each week after covering necessities, such as food, housing, and bills. After paying these costs, 17% have nothing left, or are further in debt, a 42% increase from the figure last year.
As the cost-of-living crisis puts pressure on workers’ pay cheques, the majority of those in low pay are having to make sacrifices to cope. In the past year, 61% of those polled revealed they had cut back on food or heating, fallen behind on bills or housing payments, or taken out a payday loan to cover essentials.
Victoria Miller, Foodbank Manager, Chipping Barnet Foodbank:
“These findings reflect what we see week in, week out at Chipping Barnet Foodbank. People who are doing everything right, working, budgeting carefully, are still ending up at our door because their wages don’t stretch far enough to cover rent, food and bills.
“Through our advice and employment support, we’re increasingly seeing people who are in work but unable to build any savings or absorb an unexpected cost. A real Living Wage would mean fewer working households having to choose between heating and eating, and fewer of them needing a foodbank at all.”
Tracy Armstrong, Citizens Advice Newcastle CEO, said:
“The findings of this report reflect what we see every day at Citizens Advice Newcastle. With one in three households we support who are in a negative budget including someone in work, and more than half of those households having someone working full time, it is clear that employment alone is no longer a guarantee of financial security.
“Our advisers are supporting growing numbers of people in work who are struggling to afford essentials such as food, energy and housing costs, and who are being forced to make impossible choices about which bills to pay and what they can go without. We are also seeing increasing levels of debt and financial hardship among working households who have little resilience to cope with rising living costs.
“Paying the real Living Wage would make a significant difference, helping people to meet their basic living costs, reducing financial stress and debt, and giving working households greater stability and security. It is an important step towards tackling in-work poverty and ensuring that work provides a genuine route out of hardship.”
Megan, an education worker who took part in the research, shared:
“I find it difficult to think about the fact that I work full-time and I do sometimes hours that aren’t sociable hours, and that I don’t get to spend any money at all on anything that’s enjoyable.
“We haven’t had a washing machine for eight weeks. We don’t have just £500 sitting there… because there’s no money there, there’s no safety. I’ve not saved any money since 2021.”
“Every day is just that little bit more negative, and you’re that little bit more isolated because you simply can’t afford basic things that you should be able to.”
