A significant portion of UK workers earning under the real Living Wage face severe financial strain, new research reveals.
- 42% of these workers have less than £10 remaining each week after covering basic expenses.
- 58% cannot afford an unexpected £850 cost, posing financial challenges.
- Many workers experience deteriorating mental health due to financial stress.
- Calls for increased wages align with the upcoming Living Wage Foundation announcement.
New findings by the Living Wage Foundation underscore the precarious financial situation faced by UK workers earning below the real Living Wage. It has been revealed that 42% of these workers, amounting to approximately 2.2 million individuals, have a meager sum of under £10 left after meeting essential expenses each week. Additionally, 58% of workers, translating to about 3.1 million people, are incapable of handling an unexpected expense of £850, which is slightly more than two weeks’ income for those earning the government’s National Living Wage. This financial vulnerability comes at a critical time, just before the announcement of the next year’s Living Wage rates slated for October 23, 2023.
The research highlights that more than half of the respondents are experiencing worsened financial conditions compared to the previous year. Essential expenses such as housing, food, utilities, and transport are leaving 42% of workers with minimal resources. Particularly worrying is that 63% of women in this demographic are unable to afford surprise expenses amounting to £850, which could include essential repairs or bills. It becomes evident that the absence of a financial buffer leaves these workers at significant risk should their income be disrupted, as unemployment rates climb to a two-and-a-half-year high.
The challenging financial landscape has dire consequences for the mental health and well-being of the low-paid labor force. Around 67% of these individuals report that their wages have negatively impacted their mental health, increasing anxiety levels and adversely affecting sleep for 65%. Moreover, 53% of respondents express that their pay has strained personal relationships. The financial distress has also led two out of five workers to resort to food banks, with a third skipping meals due to financial hardships and 31% struggling to maintain their utility bill payments. The inability to heat homes is another reality for 24% of these workers.
Katherine Chapman, Director of the Living Wage Foundation, stresses the gravity of the situation, emphasizing the importance of the real Living Wage in enabling workers to secure not just survival but a dignified life. The real Living Wage allows for covering unexpected costs that many take for granted, such as emergency repairs or family gifts. As the movement grows, with over 15,000 employers embracing the Living Wage, Chapman advocates for more organizations to join in recognizing the broader benefits that come with adequately compensating workers.
Individual accounts, such as that of Sam from Thomas Kneale, underscore the transformative impact of being paid a real Living Wage. Previously limited by financial constraints, Sam can now afford basic luxuries such as holidays and a comfortable home. Similarly, Brett Mendell, Managing Director at Thomas Kneale & Co Ltd, articulates the significance of the real Living Wage as a foundation for business success, promoting employee stability, productivity, and retention. Kristina Maculska, a catering team member at London Stadium, reaffirms this by highlighting the positive effects on motivation and security. Such testimonies fortify the narrative that fair compensation leads to both individual and organizational prosperity.
The ongoing discourse on living wages accentuates the urgent need for enhanced financial resilience among UK workers.
