Last year saw a sharp rise in the number of low-paid jobs in the UK with 4.5 million jobs paying below the ‘real’ Living Wage, 800,000 more than in 2023.

New research from the Living Wage Foundation reveals that in 2024, nearly one in six (15.7%) jobs paid below real Living Wage in 2024, 800,000 more than in 2023.

The figures were the result of an analysis of new Office for National Statistics data.

The real Living Wage is a voluntary pay rate based on the cost of living. It is set each year by the Resolution Foundation. More than 15,000 have signed up to pay the rate, which is higher than the government’s national minimum wage.

Since October 2024, it is £12.60 per hour outside of London and £13.85 per hour in London. The national minimum wage from 1 April 2025 will be £12.21 for those aged 21 and over, up from £11.44 currently.

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According to the Living Wage Foundation, the findings reveal that more jobs are failing to keep up with costs, pushing increasing numbers of workers into “at-work poverty”.

According to further research by Cardiff Business School, commissioned by the Living Wage Foundation, if just a quarter of those earning below the Living Wage saw their pay rise to the real Living Wage, the increase in wages, productivity and spending would deliver £1.2 billion back into the UK economy.

The hospitality sector had the highest proportion of low-paid jobs, with 53.6% of all jobs in the sector paid below the real Living Wage, found the study. This equated to more than 770,000 jobs – about twice as high as the next two sectors with the highest rates of low pay: wholesale and retail (30%) and arts, entertainment and recreation (29.2%).

The sector with the most low-paid jobs is wholesale and retail (1,064,000 jobs). There were 677,000 social care and health jobs that also fell into the low pay bracket.

Northern Ireland had the highest proportion of low paid jobs (20.6%), closely followed by north east England (19.2%) and East Midlands (18.8%). Northern Ireland also had the steepest increase in the proportion of low-paid jobs compared with 2023, rising 4.6 percentage points.

The foundation claimed that over the past three years, increasing numbers of employers had signed up to pay the real Living Wage, with one in seven employees now working for an accredited Living Wage Employer.

Katherine Chapman, director of the Living Wage Foundation, said: “High inflation and rising living costs have led to sharp increases in the real Living Wage rates in recent years and these increases have outpaced wage growth for many workers on lower earnings. This means that despite continued growth in the number of accredited real Living Wage employers, the UK has seen a rise in overall jobs paying below the real Living Wage threshold. It has been heartening to see that despite sharp rate increases and current cost pressures on businesses, we are continuing to see employers choosing to sign up.”

 

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