More than 2 million people are left with less than £10 a week after spending their wages on essentials, according to the Living Wage Foundation.
The LWF found that 42% (2.2 million) of workers who earn below the ‘real’ Living Wage – recommended by the foundation based on a broader cost of living estimate than the statutory living wage set by the government – have less than £10 after bills, housing, utilities and transport.
Around 3.1 million people would be unable to afford an unexpected £850 expense, such as boiler repair or car maintenance, it found. This is the equivalent of just over two weeks’ earnings for those on the government’s statutory minimum.
Two in five workers have used a food bank in the last year, the LWF said, and 28% have relied on them at least once a month. In London, more than half of workers have been forced to use a food bank.
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The LWF’s survey also found that 31% have fallen behind on household bills, 24% have been unable to heat their homes due to financial constraints, and one in three have skipped meals.
Financial struggles have a knock-on effect on employees’ mental health, according to the survey.
Just over two-thirds (67%) said their pay had a detrimental impact on their mental health and the same proportion said they had experienced increased anxiety levels due to their financial situation.
Sleep was an issue for 65% of respondents, while 53% reported that their pay negatively affected their relationships.
The LWF will announce its new Living Wage rates for 2024-25 on 23 October. Currently, the rate is £12.00 per hour in the UK and £13.15 for those in London, with expected increases reflecting rising living costs.
The government’s current rate is £11.44 an hour for employees aged 21 and over, and will increase on 1 April 2025.
In its Employment Rights Bill, released last week, the government has said it will create new Fair Pay Agreements for adult social care so the sector can set its own benchmarks, and will reinstate the School Support Staff negotiating body.
It has also committed to removing the age bands currently imposed in national minimum wage rates, and expanding the remit of the Low Pay Commission to take into account the cost of living when setting rates.
The LFW found that over half of employees (52%) believe that increasing pay is the most important thing their employer could offer, while 62% think that being paid in line with the cost of living would improve their mental health.
Katherine Chapman, LWF director, said the research showed the “stark reality” facing millions of workers.
“The real Living Wage is the only UK wage rate calculated solely on the cost of living and is a lifeline for workers and their families, enabling people to live not just survive. It means being able to cover an unexpected bill or buy a gift for a child’s birthday – things many of us take for granted,” she said.
Kristina Maculska, who works for the catering team at London Stadium, which is a Living Wage employer, aded: “The real Living Wage makes a real difference to me and my family especially when the cost of living is so high, particularly in London.
“The real Living Wage has a positive impact on my motivation and productivity at work. Additionally, it helps to feel secure about tomorrow and maintain stable mental health, which is important for healthy relationships with colleagues and family.”
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