Report

Life on low pay during a cost-of-living-crisis

This report from UK think tank the Living Wage Foundation looks at the UK’s 4.8m workers earning a wage which doesn’t meet actual living costs.

With sky-high inflation becoming increasingly commonplace, the UK is facing the worst cost-of-living crisis in half a century. The crisis shows few signs of slowing any time soon, with significant drops in inflation not expected until 2023. While workers across the income distribution are feeling the squeeze, the picture is particularly bleak for the UK’s 4.8m workers earning a wage which doesn’t meet actual living costs. This is the third time we have ran the ‘Life on Low Pay’ survey to track the real-life impact of being paid less than the Living Wage. The results are concerning. The nation’s low paid are going without essentials and falling behind on bills at a greater rate than ever before, including during the Covid-19 pandemic.

The areas most impacted by the current bout of inflation are also the areas workers are making the most severe cutbacks. Energy bills – a key driver of the current cost-of-living crisis – are a key example of this, with the rate of workers falling behind on household bills and being unable to heat their homes over the past 12 months increasing dramatically. Food is another area in which low paid workers are struggling. They are more likely to report skipping meals regularly for financial reasons than ever before – with 42 per cent saying they had done this, which has increased by ten percentage points in the last six months alone. These findings make the looming threat of higher living costs in the months and years ahead an even scarier prospect.