- The Living Wage Foundation has released a new study that shows 42% of those earning less than the Living Wage, or around 2.2 millions people, only have PS10 per week left after paying for essentials.
- Research also showed that 58%, or around 3.1 millions people, who earn below the Real Living Wage are unable afford to pay for an unexpected PS850 expense.
- PS850 is equivalent to two weeks of wages for those earning the “National Living Wage” (the current minimum legal wage for adults over 21).
- This news is just one week before the Living Wage Foundation announces new rates for the years 2023-2024. The announcement will take place on the 23rd October. Over 15,000 employers pay the Real Living Wage set by Living Wage Foundation.
The Living Wage Foundation has released a new report that highlights the financial precarity of UK’s lowest-paid workers. Survation surveyed 2,000 workers who earned less than the Living Wage and found that they were experiencing high levels of financial hardship.
After essential expenditure, such as housing, food and utilities, 42% of respondents have less than PS10 per week left after essential expenses.
58% of employees–and 63% women–cannot pay for an unexpected PS850 cost, such as boiler repairs, car maintenance, or large vet bills
Findings suggest that low-paid workers are not prepared to lose their income if it happens suddenly. This is a concern, as unemployment has reached its highest level for two and a quarter years.
Already, many low-paid workers face extreme hardship.
- In the last year, 28% oflow paid workers relied on food banks. In London, this number rises to more than half.
- In the last year, one third of skipped meals due to financial concerns.
- 31% are behind in their household bills.
- Due to financial restrictions, 24% of are unable to heat the homes in their families.
The survey found that the dire financial situation of low-paid workers is taking a toll on their health.
- 67% reported that their pay negatively affected their mental health.
- 67% said that their financial situation was causing them increased anxiety.
- 65% reported that their sleep was negatively affected.
- 53% said that their relationship was negatively affected by their pay.
The Living Wage Foundation will announce new Living Wage rates in 2024-2025 based on independent calculations based only on living costs. The Real Living Wage in the UK is currently PS12.00 an hour and PS13.15 in London. This will increase in line with rising living costs.
According to the survey, 52% of respondents said that an increase in pay was the most important thing that their employer could do for them. Three-quarters (62%) of respondents believe that receiving a salary in line with their cost of living will improve their mental and physical health.
Katherine Chapman is the Director of the Living Wage Foundation. She said : “Today’s research highlights stark reality for millions of low-paid workers who are struggling to pay their essentials and treading water. The Living Wage is the sole UK wage rate based on cost of living. It is a lifeline to workers and their families and allows them to live, not just survive. The real Living Wage allows workers to pay an unexpected bill, or purchase a birthday gift for their child.
It’s encouraging to see that the Living Wage movement has grown to include over 15,000 employers in this year, despite the difficult economic climate. Employers who pay the Living Wage know that their organisation thrives when their employees do. We would encourage more employers to sign up. The real Living Wage benefits people, businesses and society.”
Sam works for Living Wage accredited employers Thomas Kneale. She said:
I had to cancel appointments because I could not afford to travel and I even put off doctor’s appointments until payday due to the cost of prescriptions. All of this was really bad for my health and outlook on life.
These problems are no longer an issue for me now that I am paid a Living Wage. I’m excited about the future. I live in a comfortable house, and I’ve been on vacation a few times this year. I also have the option to go out occasionally. All my bills have been paid via direct debit and I am able to live my life as I please without worrying about money .”
Brett Mendell is the Managing Director at Living Wage Employer Thomas Kneale & Co Ltd. He said, “We believe that paying a real Living Wage to employees is the best way to start any organization. It allows colleagues earn a fair day’s pay for a good days work and not live from pay cheque to check, struggling to pay their regular bills. It is possible to have the money to save up for an unexpected bill or to go out for a night. They tell us they are more settled in their jobs because the company takes care of them. This loyalty leads to a desire to be more efficient, which results in a higher output and reduced absences and labour turnover.
Kristina Mculska, chef at London Stadium, a Living Wage employer, said that the real Living Wage made a big difference for her and her family, especially in London where costs of living are so high. The real Living wage has had a positive effect on my motivation at work and productivity. It also helps me feel confident about the future and maintain a stable mental health. This is essential for maintaining healthy relationships with my family and colleagues .”
The original HR News article After paying for essentials, 42% of workers earning less than the Living Wage have less than 10 pound sterling left each week appeared.
