One in five British workers are paid less than the living wage, a study showed today.
Some 4.82 million UK workers receive less than the living wage, the rate of pay designed to enable workers to afford a basic standard of living, the KPMG research showed.
The rate is currently £8.30 an hour in London and £7.20 in the rest of the country, compared with the national minimum wage rate of £6.19 an hour.
At a time of economic hardship, lower paid workers are feeling the impact hardest, the accountancy firm said, with more than four in 10 (41%) saying that their finances are worse now than they were just one month ago.
The living wage is a voluntary rate of pay that some employers give their staff and since 2001 it has positively impacted more than 10,000 employees and their families and redistributed over £96 million to some of the lowest paid workers in the UK, KPMG said.
But ahead of next week's Living Wage Week, the study showed that a sizeable proportion of the country's workers are paid less than this rate.
Northern Ireland has the highest proportion of people earning below the living wage (24%), followed by Wales at 23%. The lowest proportion of sub-living wage earners are in London and the South East, both at 16%.
But by number of people rather than proportion, London (570,000), the North West (also 570,000) and the South East (530,000) are the most affected areas.
Workers in the hospitality industry are the worst affected, with 90% of bar staff paid lower than the living wage.
More than four out of five waiters and waitresses (85%) were also paid less than the living wage.
Three quarters (75%) of kitchen and catering assistants, as well as launderers and dry cleaners, were paid less than the living wage, the study showed.
Some 70% of cleaners and florists also received less than the living wage.
The research also showed that, while financial confidence is generally low across the whole survey population regardless of income, it is especially pronounced among those who earn less than the living wage.
Nearly half (46%) said their appetite for major purchases has gone down in the last month, compared with just under a third (32%) of those earning above.
A third (33%) of those earning under the living wage said they have poorer cash availability now than a month ago, compared with 27% of those earning above.
Nearly half (47%) expect their finances to be in a worse condition in a year's time than now, slightly more than the 43% of those earning above the living wage.
And nearly a quarter (23%) feel that their job security has got worse, compared with 16% of those earning above.
Commenting on the study, TUC general secretary designate Frances O'Grady said: "It is shocking that in this day and age one in five workers is still earning less than is needed to maintain a decent standard of living.
"The living wage is not a luxury and means that low-paid workers don't have to make tough choices over whether they can afford the everyday things that most of us take for granted, such as their fuel bill or a winter coat for their children.
"Many more employers could afford to adopt the living wage and we hope that many more decide to pay it in the coming months. Now more than ever is the time for employers to put an end to poverty pay."
Marianne Fallon, of 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. At KPMG, we have found that the improved motivation and performance, and the lower leaver and absentee rate, amongst staff in receipt of a living wage means that the cost is offset and paying it is the right thing for our business.
"With Living Wage Week fast approaching, we would urge more big employers to consider paying their staff a wage that means they can afford a socially acceptable quality of life. We think it is the responsible thing to do.
"Tackling in-work poverty is also vital if we are to enable more people to improve their life prospects and increase social mobility in this country."
Rhys Moore, director of the Living Wage Foundation, said: "Paying a living wage makes a huge difference to the quality of life of thousands of cleaners, caterers and security staff across the country.
"It is really encouraging to see nearly 100 organisations now signed up and accredited. But that still leaves many more organisations that aren't. We hope that Living Wage Week will create real momentum and that many more employers will sign up."
The research, commissioned by KPMG from Markit, contained analysis of the Office for National Statistics (ONS) Annual Survey of Hours and Earnings with Markit's own Household Finance Index survey.
The Markit Household Finance Index survey was carried out between October 11 and 15 2012 amongst 903 respondents in employment.
The ONS survey for 2011 was based on approximately 190,000 returns and related to the pay period which included April 13.
Len McCluskey, general secretary of Unite, said: "While the City continues to enjoy obscene bonuses, ordinary working people are struggling to get by as the Government's failed economic policies take their toil.
"Our own research shows that, on average, people are being forced to borrow over £325 a month to pay for essentials such as food and housing costs.
"Low pay and squeezed wages are becoming more and more of a problem as the Government cuts working benefits such as child tax credits.
"The Government need to introduce an immediate increase in the minimum wage of one pound an hour as a step towards a living wage and to help boost the economy by putting money in people's pockets."
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