Employment

'Time for a new deal': UK's new minimum wage still not enough to cover 'a decent standard of life'

Minimum wage, known as the national living wage, is up this month. But campaigners warn it's more than £1,000 short of the money people need to afford the cost of living

minimum wage/ hospitality

Workers across the country will see a boost to their income. Image: Unsplash

The minimum wage has risen this April in a boost for millions of UK workers, but charities have warned that it “falls short” of the cost of living.

Known as the national living wage, payments have risen from £10.42 to £11.44 an hour. It applies to all workers over the age of 21, and younger workers will also get a pay rise.

It means that 2.7 million low-paid workers will see their income increase this month – but campaigners claim it does not go far enough.

The Living Wage Foundation has found that the new national living wage leaves workers £1,092 short of a real living wage per year – that’s the amount the charity estimates people need to afford the cost of living. This difference could pay for 18 weeks of food for an average household.

It’s even worse for workers living in London, who would need more than £3,300 extra to bring earnings in line with the London living wage. This could pay for 49 weeks of food, almost a year.

Katherine Chapman, director of the Living Wage Foundation, said: “The rise in the statutory national living wage is welcome news for the 3.7 million low paid workers across the country, but this still falls short of a wage which takes into account the real cost of living.  

“The voluntary real living wage is £12 an hour (£13.15 for workers in London) and allows people in the UK to live a decent standard of life. Over 14,000 employers across the UK are living-wage accredited and committed to going above the government minimum to ensure their staff are always paid in line with the cost of living.

“Over the last few years of tough economic times, it has been heartening to see so many more   businesses join the movement. As well as good for workers and their families, business that pay the real living wage report improved staff retention and productivity. We encourage other organisations who can, to make the living wage commitment too.”



The Trades Union Congress (TUC) has found that there are still online adverts for salaried jobs which pay less than the minimum wage. The Low Pay Commission estimates that more than 430,000 salaried workers are on the minimum wage or less, and people could find that they are being underpaid if their wages do not rise.

Even where salaries do go up, the TUC has warned that salaried workers could still face an additional risk of underpayment if they work overtime.

The average weekly unpaid overtime is more than seven hours. This means someone who is contracted 35 hours per week who does the typical amount of overtime would need to be paid £25,000 to be paid the minimum wage at an hourly rate, according to TUC analysis.

Paul Nowak, general secretary of the TUC, said: “The minimum wage is the very least employers should pay their workers. It’s their legal duty. But too many workers are cheated out of pay by bad bosses, who choose to pay staff illegally low rates.  

“Minimum wage cheats exploit workers from a range of jobs – and desk-based office jobs are no exception. And to make matters worse, many desk-based workers are expected to put in hours of overtime for free. That’s not right.  

“It’s time for a new deal for working people – like Labour is proposing – which will deliver a real living wage, boost wages across the board and beef up our enforcement system so that bad bosses can’t get away with failing to pay their staff the minimum wage.”

Nye Cominetti, principal economist at the Resolution Foundation, added: “The introduction of the minimum wage 25 years ago is the single most successful economic policy in a generation, boosting the wages of millions of Britain’s lowest earners by up to £6,000 a year.

“The policy was introduced in the face of fierce opposition, but now experiences strong cross-party support. With its current remit ending this year, now is the time to discuss the future of the minimum wage and low pay more widely ahead of the election.

“Politicians should reflect on why the minimum wage has been so successful – such as the combination of long-term political direction and independent, expert-led oversight – and whether this approach could be broadened to tackle some of the UK’s other low pay challenges.”

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