Number stuck on low pay grows, as nearly 1 in 5 paid less than Real Living Wage

06 November 2017

Almost one in five workers in the UK are paid less than the Real Living Wage, new research has shown.

Estimates published by KPMG revealed that 5.6 million people in the UK take home less than £8.25 per hour (or £9.40 in London), which at the time of the survey had been calculated as the amount a person would need to earn in order to adequately cover living costs.

The Real Living Wage is set by the National Living Wage Foundation and differs from the National Living Wage, which is a government implemented minimum wage available only to the over-25s that falls well below the Real Living Wage at just £7.50 per hour.

The new figures show that low pay is a growing problem in the UK, as the proportion of people paid less than the Real Living Wage has increased from 19% in 2012 to 22% in 2016, amounting to around 1.1 million more people with an income that falls below average living costs.

Hardest hit are part-time workers, among whom 43% are paid less than the Real Living Wage compared with just 14% of those working full-time.

About a quarter of those on low pay said there household finances worsened in October 2016, and 68% expected to see more pressure on their living costs over the next year.

Simon Collins, senior partner and UK chairman, KPMG said: “Today’s figures show that much more needs to be done if we are to eradicate in-work poverty. The reality is that more than five million working people in the UK are only earning enough to ‘get by’ and cannot enjoy the standard of life so many of us take for granted.”

“Previously many businesses worried that increased wages hit their bottom line, but there is ample evidence to suggest the opposite. By paying the Living Wage we have seen improved staff morale, a rise in service standards, improved retention of staff and increased productivity,” he continued.

Across the country, around 3,000 employers have signed up to voluntarily pay the Real Living Wage, which today was raised to £8.75 (or £10.20 in London).