Inflation eases but cost of living crisis far from over for low paid workers

  • A new report from the Living Wage Foundation has found that despite inflation easing, the UK’s lowest paid continue to suffer due to cost-of-living-crisis.  

  • Measures of severe financial hardship remain well above pre-cost-of-living crisis levels: 

  • 60% have used a foodbank in the past year 

  • 50% say they are worse off than a year ago  

  • 39% have regularly skipped meals 

  • 39% have fallen behind on household bills 

  • News comes a month before the Living Wage Foundation announces new Living Wage rates for 2023-24. 

  • Over 3.5 million workers earn below the real Living Wage, the voluntary wage rate set by the Living Wage Foundation. The real Living Wage is currently £10.90 in the UK and £11.95 in London.  

Despite inflation easing, new research from the Living Wage Foundation shows that the cost-of-living crisis is far from over for Britain’s 3.5m low paid workers. 

Polling of over 2,000 workers earning less than the real Living Wage, by Survation, found that levels of financial hardship amongst low paid workers remained high and well above pre-cost-of-living-crisis figures. The polling revealed that amongst low paid workers over the past 12 months: 

  • 50% say they are worse off than a year ago, 

  • 39% regularly skipped meals for financial reasons, 

  • 39% had fallen behind with household bills, 

  • A third (32%) had been unable to heat their homes due to financial reasons 

  • Over a quarter (27%) had fallen behind on their rent or mortgage payments 

  • Over a fifth (21%) took out a payday loan to cover just their essentials 

Despite inflation easing, workers on the lowest pay have been hit hardest by higher food and energy costs because they spend a greater proportion of their income on these necessities. Today’s report provides further evidence that the cost-of-living crisis is far from over for the 3.5 million workers earning below the real Living Wage and shows that more needs to be done to support them. 

Half of those surveyed reported that they are worse off than a year ago, with 65% saying it was because of the increased cost-of-living. Food bank usage is worse than a year ago for those on the lowest pay: 

  • 60% having visited food banks over the past 12 months, up from 56% in the previous year.  

  • 43% visited a food bank at least once a month.  

  • 32% of low paid workers who have visited a food bank over the past 12 months say their use has increased, while 44% say their use has stayed the same. 

Financial pressures caused by low pay continue to negatively affect workers’ health, relationships and quality of life. Respondents said that earning below the real Living Wage has: 

  • Negatively impacted their mental health (52%) 

  • Made their overall quality of life worse (50%). 

  • Made their relationships with close friends and family worse (39%) 

The news comes a month before the Living Wage Foundation announces new Living Wage rates for the year 2023-24, which will reflect increasing living costs. The real Living Wage is currently £10.90 for those in the UK and a higher rate of £11.95 in London. 

More than half of low paid workers said receiving a pay rise in line with the cost of living would have a positive impact on their quality of life, relationships, mental- and physical health, with 65% saying it would make their overall quality of life better. 

Katherine Chapman, Director of the Living Wage Foundation said: “After more than a year of record price rises, we are finally starting to see inflation ease. But today’s research shows that the cost-of-living crisis is far from over, especially for the 3.5 million workers who are paid less than the real Living Wage. With over half of those on low pay even worse off than a year ago, 3 in 5 visiting foodbanks, and 2 in 5 regularly skipping meals, more needs to be done to protect the lowest paid workers.  

Despite tough economic times, it is heartening that employers are doing right by their staff and signing up to become Living Wage employers.  Employers can protect their staff from rising prices by joining the movement of over 13,000 businesses who pay a real Living Wage calculated based on living costs every year.” 

Carolina, a cleaner and recruitment assistant at accredited Living Wage Employer Just Helpers, who was on low pay at previous employers, said: “It was quite difficult for me when my income was low. I had no money left over for savings, the gym, or entertainment. To save money on high rent, I had to share a tiny apartment with my family. 
Since I began working with Just Helpers, my quality of life has greatly improved. I relocated to a new apartment, had enough cash to pay my expenses, and can now go out on the weekends.” 

Jo, a machine operator at accredited Living Wage Employer One+All, who always had minimum wage jobs before working at One+All, said: “I left school over 30 years ago and I was always paid the minimum wage. Money was always a problem: juggling bills, keeping to a budget and being short of cash. That’s just the way it was. 

I was really pleased to get the job at One+All three years ago and when they told me they paid the real Living Wage I laughed! Working for a real living wage employer has made a big difference to me and my family. Like everyone I work with, I come to work happy and with no money worries or stress - even with the higher prices of everything.” 

Simon Fann, Manager of Truro Foodbank: “At Truro foodbank we see day in day out the pressure that rising prices is putting on workers and their families every day. We also know that the pressure isn’t easing - we are busier now than this time last year, and we’re also seeing an increase in visitors who are in work but aren’t paid a decent wage. Earning the real Living Wage is a foundation of a decent life, it’s simply not right that so many people are in work and unable to pay for essentials like food, rent and energy. With 25,000 workers earning below the real Living Wage in Cornwall, we are calling on businesses who can afford to do so to pay their staff a decent wage and accredit with the Living Wage Foundation”. 

Read the report here.

For more information and any further enquiries, please contact: 

Emily Roe: Emily.roe@livingwage.org.uk / 07581430557 

Klervi Mignon: klervi.mignon@livingwage.org.uk  

Matt Ford: matt.ford@livingwage.org.uk / 07507 478967