A new poll shows less than one in ten adults believe that they could realistically live on the minimum wage, highlighting the appetite for a higher Living Wage across the UK in order to cover essential bills and help build savings.
The poll was commissioned by Nationwide Building Society in partnership with the Living Wage Foundation to highlight the gap between the current minimum wage and the increasing cost of living. It comes as the Living Wage reaches a significant milestone after Nationwide became the first major high street name to sign up as a Principal Partner, which is a commitment to help encourage other firms sign up to the scheme.
Nationwide's position as a Principal Partner follows the Society's accreditation as a Living Wage employer. This accreditation is a pledge by the Society to pay all employees, from permanent employees to contractors and temporary workers, at least £7.65 an hour, or £8.80 in London - significantly higher than the current minimum wage of £6.31 an hour.
According to the survey, 16% of people in the Britain earn less than the Living Wage. This increases to over one in five (22%) when looking at those in the lower social grade group (C2DE).
Fewer than one in ten people (9%) feel they would be able to maintain a reasonable standard of living on the minimum wage of approximately £950 a month, according to the survey, while around half of people (51%) said they would need to earn at least £1,100 a month to maintain a reasonable standard of living - broadly the monthly salary of someone receiving the Living Wage.
When asked on which three things they would spend an additional £148.07 a month - the difference between the Living Wage and the National Minimum Wage - those in the lower social grades would be most likely to use this extra income to provide basics for themselves and their families. More than half said they would spend the difference on food (51%), while 47% would use the money to cover bills. More than four in ten people would use the money to bolster, or start, savings (43%).
The survey also found that 85% of people think that companies should voluntarily pay their employees the Living Wage if they are able to. More than half of those polled stated that they would be more likely to use the goods and services of a company that paid its employees the Living Wage (54%).
Rhys Moore, Director of the Living Wage Foundation, said: "We are delighted to welcome Nationwide to the Living Wage movement as both principal partners of the Living Wage Foundation and accredited employers.
"As the UK's largest building society, this move brings the Living Wage to high streets across the country, and showcases that the best employers are voluntarily signing up to pay the Living Wage now. The Living Wage is a robust calculation that reflects the real cost of living, rewarding a hard day's work with a fair day's pay. This poll shows that the benefits of the Living Wage are felt first and foremost at home, with employees better able to afford essentials, from feeding the family to saving for a rainy day.
"The National Minimum Wage provides an effective robust minimum floor for wages and has all but eliminated extremely low pay in the UK. One side effect is that we now see rates of pay at the lower end of the market clustered at or just above the National Minimum Wage. The Living Wage provides a recognised benchmark for employers who are able to pay more."
Alison Robb, Group Director at Nationwide, said: "We are hugely proud to become a Principal Partner of the Living Wage Foundation, and we are looking forward to working with the Foundation to encourage other employers to sign up in future. Nationwide's Living Wage accreditation shows our commitment to doing the right thing by our people and we are proud to take a leading role in the campaign for fairer pay."