28 September 2023

The Living Wage Foundation has released the report ‘Life on Low Pay as Inflation Begins to Ease’. This is the fourth time the Living Wage Foundation has run the ‘Life on Low Pay’ survey to track the real-life impact of being paid less than the real Living Wage.

Costs remain high even as inflation begins to ease, leaving many low paid workers facing ongoing financial hardship. It has been reported that while workers across the income distribution are feeling the squeeze, the situation is particularly challenging for the UK’s 3.5 million low paid workers. From the research carried out, this year’s polling shows that 50% of workers are worse off than a year ago, with 65% reporting it was because of the increased cost-of-living.

Below are the key findings from the report:

Financial hardship

  • 39% of low paid workers reported regularly skipping meals for financial reasons and falling behind on household bills respectively, both down from 42% in August 2022
  • the proportion of low paid workers that reported being unable to heat their homes for financial reasons stayed level at 32% over this period, as did the proportion of low paid workers falling behind on rent or mortgage payments (27% in 2023, 28% in 2022)
  • the incidence of low paid workers getting a pay day loan to cover essentials fell slightly from 24% to 21% between August 2022 and August 2023.

Income after essential expenses

  • after paying for essentials, 27% of low paid workers either had no money left over each week or had to use loans to cover essentials, showing no change since our last survey in August 2022 
  • an additional 42% having less than £30 left over per week, with 13% having less than £10

Changes in work

  • 55% of respondents reported undertaking more work in the past 12 months because of the increased cost-of-living
  • of those, almost half (46%) reported taking on more hours at their existing workplace, while a further 32% reported taking a second job

Reliance on foodbanks

  • 60% of workers reported using the services of a foodbank over the past 12 months, compared to 56% reported last year
  • 32% of these respondents reported increasing their use of foodbanks over the past 12 months, while 44% said their use had stayed the same
  • 43% of workers reported using the services of a foodbank regularly (at least once per month) over the past 12 months

Impact of low pay on health, relationships and quality of life

  • over half of respondents reported that there would be a positive impact on their health, relationships and quality of life if their pay was increased in line with the cost-of-living

Expectations for the next 12 months

  • low paid workers were slightly more optimistic about future wage growth compared to 12 months ago. In August 2023, more low paid workers (22%) expected their hourly pay to increase in-line with, or above the cost-of-living over the next 12 months, compared to 15% in August 2022
  • nearly 40% of workers ranked increased pay as the most effective measure an employer could take to help them deal with the increased cost-of-living. Low paid workers were more than three times as likely to cite this than any other measure 
  • after pay, the other top ranked factors included better work life balance, more hours and more support with financial well-being.

It has further been expressed that as the results of this survey show, real terms pay cut is simply not an option for the lowest paid workers, many of whom have already been forgoing essentials like food and heating. That is why it is more important than ever that employers do right by their employees and pay them a Real Living Wage.

Read the full report, here.

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