The UK is witnessing an unprecedented rise in low-paid jobs, with both employers and workers coming under increasing strain. According to the latest report from the Living Wage Foundation (LWF) released on Feb. 27, the proportion of jobs paying below the real living wage grew at a record pace last year, reflecting the mounting pressures businesses face ahead of the scheduled corporate tax hike in April, as well as the increasing financial challenges for workers in low-wage roles.
The LWF study revealed that as of April last year, 5 million jobs in the UK paid below the real living wage, representing 15.7% of all positions nationwide. The real living wage, determined annually by the LWF as the minimum income required for an acceptable standard of living, is currently £12.60 per hour across the UK and £13.80 per hour in London. Based on this benchmark, 3.7 million positions—accounting for 13% of total jobs—were classified as low-paid jobs in 2023.
LWF Director Katherine Chapman noted that the surge in low-paid jobs marks the largest annual increase since the organization began tracking such data in 2012. Millions of workers are struggling to cover basic living costs, she said. She added that the sharp reversal of trends observed during the pandemic—when labor shortages in sectors like hospitality and logistics forced employers to offer wages significantly above the statutory minimum—underscores the challenges workers now face.
The slowdown in hiring reflects the immense cost pressures and stagnant economic activity affecting businesses. Employers are bracing for further challenges as minimum wage rates and employer national insurance contributions are set to rise in April, which could lead to higher goods prices and more layoffs.
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