One in five workers in Britain earns less than the living wage

Published on 29/10/2012 01:11

nearly five million British workers are paid less than the living wage, a study shows today.

Some 4.82 million – or around one in five – workers in the UK receive less than the living wage, the rate of pay designed to enable workers to afford a basic standard of living, the KPMG 
research reveals.

The living wage rate is currently £8.30 an hour in London and £7.20 in the rest of the country, compared with the national minimum wage rate of £6.19 an hour.

At a time of economic hardship, lower paid workers are feeling the impact hardest, the accountancy firm said, with more than four in ten (41 per cent) saying that their finances are worse now than they were just one month ago.

The living wage is a voluntary rate of pay that some employers give their staff, and since 2001 it has positively impacted more than 10,000 employees and their families, and redistributed over £96 million to some of the lowest-paid workers in the UK, KPMG said. The study shows that a sizeable proportion of the country’s workers are paid less than this rate.

Workers in the hospitality industry are the worst affected, with 90 per cent of bar staff paid lower than the living wage.

More than four out of five waiters and waitresses (85 per cent) are also paid less than the living wage.

Three-quarters of kitchen and catering assistants, as well as launderers and dry cleaners, were paid less than the living wage, the study shows.

Some 70 per cent of cleaners and florists also received less than the living wage.

The research also reveals that, while financial confidence is generally low across the whole surveyed population regardless of income, it is especially pronounced among those who earn less than the living wage. Nearly half (46 per cent) say their 
appetite for major purchases has gone down in the last month, compared with just under a third (32 per cent) of those earning above.

A third (33 per cent) of those earning under the living wage say they have poorer cash availability now than a month ago, compared with 27 per cent of those earning above.

Nearly half (47 per cent) expect their finances to be in a worse condition in a year’s time than now, slightly more than the 43 per cent of those earning above the living wage.

And nearly a quarter (23 per cent) feel that their job security has got worse, compared with 16 per cent of those earning above.

TUC general secretary designate Frances O’Grady said: “It is shocking that in this day and age one in five workers is still earning less than is needed to maintain a decent standard of living.”

Marianne Fallon, of KPMG, said: “This research really lays bare the extent of the problem. Those on the lowest pay are suffering the most.”