One in five UK workers are still earning below the national Living Wage according to new research

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According to new research from KPMG 21% of people in the UK are struggling to get out of in-work poverty. While the total number of people earning below the Living Wage fell from an estimated 5.6 million in 2016 to an estimated 5.5 million in 2017, this still leaves the total of one million more people earning below the real Living Wage in 2012.

Katherine Chapman, Living Wage Foundation Director states: “Today’s figures show that, whilst moving in the right direction, there are still 5.5 million people earning less than the real Living Wage across the UK and with the cost of living increasing as inflation rises, those on lowest incomes are really feeling the squeeze. The new Living Wage rates will be announced tomorrow and with tough times ahead it’s more important than ever that great employers are stepping up to ensure that their staff earn a wage that ensures workers can live with dignity.”

The research also found that for five years in a row, women are far more likely to be paid below the Living Wage than men, with nearly 225,000 more women in work than last year more than one in four (26%) earn less than the Living Wage compared to 16% of men.

Commenting on the number of people earning below the real Living Wage, Andy Bagnall, director at KPMG UK, said: “In the past, many businesses were worried that increased wages would hit their bottom line, but there is ample evidence to suggest otherwise. By paying the real Living Wage since 2006 KPMG has seen improved staff morale, a rise in service standards, improved retention of staff and increased productivity. More importantly, it has been an enabler for social mobility.”

“It is clear that it may not be possible or practical for everyone, but businesses need to do what they can to address the problem of low pay. Of course, change cannot happen instantly, but making an initial assessment is an important first step.”

Part-time employees are in a worse position as the study found around 3.1 million (42%) part-time workers earn less than the real Living Wage, whereas only 2.4 million (13%) full-time workers earn less. Worryingly part-time roles represent more than half (56%) of all jobs paying less than the real Living Wage.

For those trapped in in-work poverty their issues extend to their household finances, 27% respondents earning less than the real Living wage indicated that their household finances continue to decline while only 7% experienced an improvement. These findings may stem from a sharp increase in the cost of living which 59% of respondents indicated.

There is also a clear regional divide, as Northern Ireland has the highest proportion (26%) of jobs with earnings below the real Living Wage, closely followed by the East Midlands, Yorkshire and Humber, Wales and the West Midlands all at around 24%.

“Even though the number of people earning below the real Living Wage has slightly decreased, the reality is that those at the bottom of the pay scale are really feeling the squeeze due to increases in the cost of living and decline in pay. Looking ahead, a rise in inflation levels will further eat into the pay-packets of those already struggling – it’s time for the business community to play its part to help those working earn a respectable wage”, concludes Bagnall.

Historical overview of UK voluntary Living Wage estimates (all employee jobs)

YearNumber earning below voluntary Living Wage (millions)*Percentage of jobs below voluntary Living Wage*Real UK Living Wage (£)Real London Living Wage (£)

2012

4.5

19%

7.20

8.30

2013

4.9

20%

7.45

8.55

2014

5.3

21%

7.65

8.80

2015

5.6

22%

7.85

9.15

2016

5.6

22%

8.25

9.40

2017

5.5

21%

8.45

9.75

* IHS Markit estimates, rounded