Despite gradual easing pressures on UK firms, low-paid workers remain vulnerable amidst the enduring cost of living crisis.
- A recent survey reveals only 30% of British companies are planning pay increases that exceed inflation this year.
- The Work Foundation highlights a gap between employer intentions and actions, with many low-income workers still struggling.
- Interest rates remain high, and real wages are not expected to rebound to 2008 levels until 2026.
- Targeted financial well-being measures are urged to support the most vulnerable employees.
Despite some relief in business pressures over the past 15 months, many low-paid workers in the UK continue to face significant financial challenges. A survey commissioned by the Work Foundation found that only 30% of companies plan to offer pay rises that surpass inflation, leaving a substantial portion of the workforce without sufficient financial support.
The poll, conducted with over 1,000 businesses, noted that while 38% of employers have introduced new financial well-being measures since early 2023, a notable 34% could not afford to provide such assistance. These measures include various initiatives like extending benefits packages, offering overtime, or one-off payments.
Director Ben Harrison from the Work Foundation at Lancaster University emphasized that even though inflation rates are declining, the economic situation remains dire for low-paid workers. With interest rates at a 16-year peak and forecasts indicating that real wages will not return to pre-2008 levels until 2026, many individuals continue to find it challenging to manage increasing living and housing costs.
The lack of adequate support is particularly evident in larger organizations where staffing issues are more pronounced compared to small and medium enterprises (SMEs). Despite a slight improvement in recruitment and retention issues, a significant number of businesses are finding it difficult to implement above-inflation pay increases.
As government support is anticipated to wane, the Work Foundation and other advocates are urging businesses to invest in financial well-being strategies that include above-inflation pay rises and enhanced job security for the most vulnerable workforce segments. This appeal is part of broader efforts to address income inequality and ensure sustainable financial health for employees.
The ongoing economic challenges necessitate employers enhancing financial support for their vulnerable workers through strategic interventions.
