At least 150,000 UK workers are set for a pay rise as the new Living Wage hourly rates rise to £8.75 around the UK, and £10.20 in London, but research from KPMG shows one in five workers are paid below this level, meaning that an estimated 5.5m employees are struggling to get out of in-work poverty
The Living Wage, set by the Living Wage Foundation is up by 3.6% across the country, while the London mayor has sanctioned a 4.6% rise in the capital.
However, research conducted by IHS Markit for KPMG found that 21% of all jobs nationwide pay below the recommended levels. It found 26% of female employees earn less than the real Living Wage, compared to 16% percent of all males.
The 2017 increases in Living Wage rates have been largely driven by higher inflation feeding through to the basket of goods and services that underpin the rates, with rising private rents and transport costs also having an impact.
Heathrow Airport is the latest employer to pledge to pay all workers the Living Wage, joining some 3,600, employers across the UK who have signed up, including a third of the FTSE 100.
Katherine Chapman, Living Wage Foundation director, said: ‘As the first Living Wage airport, bringing a pay-rise to 3,200 workers, Heathrow sets an example for other major UK employers to follow.
‘In-work poverty is today’s story. New figures out yesterday show that 5.5m people are still paid less than the real Living Wage – it’s fantastic that this year alone over a thousand more employers have chosen to go beyond the legal minimum and pay a real Living Wage, putting fairness and respect at the heart of their business.’
Andy Bagnall, director at KPMG, said: ‘The reality is that those at the bottom of the pay scale are really feeling the squeeze due to increases in the cost of living and decline in real pay. Paying a Living Wage will save huge swathes of people being unable to afford the basics they need.
‘As employers we can take active steps to address this, by paying the real Living Wage. This also delivers real and tangible business benefits. In our own firm it has improved staff morale and driven a rise in service standards, improved the retention of staff and increased our productivity.
‘It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay. Of course, change cannot happen instantly, but making an initial assessment is an important first step.’
Report by Pat Sweet
