One in five workers paid less than living wage

One in five UK workers are paid less than the living wage, according to research by accountancy firm KPMG.

The research, commissioned by KPMG from Markit, combines analysis of the Office for National Statistics’ Annual survey of hours and earnings with Markit’s Household finance index survey.

It has been published ahead of Living Wage Week, which will take place between 4-10 November, when new rates for London and the rest of the country will be announced.

The living wage is a voluntary rate of pay that some employers give their staff, which is designed to enable workers to afford a basic standard of living.

The rate is currently £8.30 an hour in London and £7.20 an hour outside of the capital. This compares to the national minimum wage rate of £6.19 an hour. 

The research found that Northern Ireland has the highest proportion of people earning below the living wage at 24%, followed by Wales at 23%. The lowest proportion of people earning below the living wage is in London and the South East, both at 16%. 

By job type, the highest proportion of workers paid below the living wage are bar staff (90%) and waiters/waitresses (85%). By number of workers, the most affected people are sales and retail assistants.

The research also found:

  • 41% of those earning less than the living wage feel that their finances are in a worse condition now than a month ago (compared to 25% of those earning above).
  • 47% earning below the living wage expect their finances to be in a worse condition in a year’s time than now (slightly more than the 43% of those earning above this level).

Marianne Fallon, head of corporate affairs at KPMG, said: “Times are difficult for many people, but of course, those on the lowest pay are suffering the most. 

“Paying a living wage makes a huge difference to the individuals and their families and yet does not actually cost an employer much more. 

“At KPMG, we have found that the improved motivation and performance, and the lower leaver and absentee rate among staff in receipt of a living wage means that the cost is offset and paying it is the right thing for our business. 

“With Living Wage Week fast approaching, we would urge more big employers to consider paying their staff a wage that means they can afford a socially acceptable quality of life. We think it is the responsible thing to do.”

Rhys Moore, director of the Living Wage Foundation, added: “Paying a living wage makes a huge difference to the quality of life of thousands of cleaners, caterers and security staff across the country. 

“It is really encouraging to see nearly 100 organisations now signed up and accredited, but that still leaves many more organisations that aren’t. We hope that living wage Week will create real momentum and that many more employers will sign up.”