A new report by accountants KPMG reveals that almost five million workers in the UK are paid less than they need to live at a basic standard.
The research says that one in five workers in the UK do not receive enough money to be classified as a Living Wage.
The rates that are required to reach a basic standard of living are £8.30 an hour in London and £7.20 in the rest of the UK.
The rates that make up the Living Wage are voluntary, unlike the National Minimum Wage of £6.19 for employees aged over 21 that employers must pay by law.
Marianne Fallon, Head of Corporate Affairs at KPMG, said: “This research really lays bare the extent of the problem of low pay in Britain. Times are difficult for many people, but of course those on the lowest pay are suffering the most. Paying a Living Wage makes a huge difference to the individuals and their families and yet does not actually cost an employer much more.”
KPMG says that in an economic environment of rising prices, low paid staff are struggling with 41 per cent saying that their finances are worse now than they were just one month ago.
46 per cent of low paid staff say that their appetite to make a major purchase is lower than it was a month ago and 38 per cent say they have poorer cash availability than one month ago.
Across the UK, Northern Ireland, at 24 per cent, has the highest proportion of people earning below the Living Wage rates but there are five other regions within two per cent of this number, suggesting that the problem is affecting people across the UK on a similar scale. The lowest levels are in London and the southeast with 16 per cent of people earning below the Living Wage level.
Certain categories of work are disproportionately affected with 90 per cent of bar staff below the living wage rate and 85 per cent of waiters and waitresses below the rate. The majority of catering staff, cleaners and florists are also below the rate. The category of worker with the highest number of employees paid below the rate is sales and retail assistants with 780,000.
The research also discovered that 47 per cent of workers who earn below the Living Wage expect to be even worse off in one year’s time, compared to 43 per cent of workers who earn above the rate.
23 per cent of workers earning below the rate see their job security as having deteriorated in the last month, compared to 16 per cent earning more than the Living Wage.